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How Biden's November stock market surge compares to those of recent Presidents-elect

Ben Werschkul
·Senior Producer and Writer
·6-min read

President-elect Joe Biden has watched the stock market surge as he prepares to take power next year. The rally appears to be driven largely by the spate of positive coronavirus vaccine news but has nevertheless been helped by some of Biden’s initial moves as President-elect.

The Dow Jones Industrial Average (^DJI) broke 30,000 for the first time one day after the news broke that the President-elect had picked Janet Yellen as his Treasury Secretary.

Mohamed El-Erian, the President of Queens' College University of Cambridge, attributed the booming market this month mostly to the positive vaccine news. But he also noted that we’ve had “clarity of our political transition, we’ve had clarity about appointments” during an appearance Friday on Yahoo Finance.

US President-elect Joe Biden delivers a Thanksgiving address at the Queen Theatre in Wilmington, Delaware, on November 25, 2020. - Biden called for an end to the "grim season of division" in the holiday speech . "I believe that this grim season of division, demonization is going to give way to a year of light," Biden said. (Photo by CHANDAN KHANNA / AFP) (Photo by CHANDAN KHANNA/AFP via Getty Images)
President-elect Joe Biden delivers a Thanksgiving address in Wilmington on November 25. (CHANDAN KHANNA/AFP via Getty Images)

President Trump of course incorrectly predicted that the markets would crash if Biden won.

Trump also often said that a President’s record should be judged based on the stock market following election day, not inauguration day.

Now, as November nears its end, the S&P 500 (^GSPC) is up over 11% for the month and it’s being noted that Biden’s start with the market ranks among the top in recent history for new Presidents.

Here’s how the markets did in other months when America learned it would soon have a new President.

2016: The ‘Trump rally’

President Trump liked to say that the stock market surged when he became President. It did but his victory actually initially rattled the markets. When the Associated Press formally called the election for him late on Tuesday night, S&P 500 futures were off 3.4%.

“This is not the status quo and we are going to have to digest that,” said Yahoo Finance Editor in chief Andy Serwer in the hours following Trump’s surprise victory.

Republican presidential nominee Donald Trump arrives for his election night rally at the New York Hilton Midtown in Manhattan, New York, U.S., November 9, 2016.  REUTERS/Andrew Kelly       TPX IMAGES OF THE DAY
President-elect Donald Trump arrives for his election night rally after being declared the winner early in the morning of November 9, 2016. (REUTERS/Andrew Kelly)

The markets did indeed digest the news and the losses turned to gains in the hours that followed as the extent of Trump’s market-friendly policies became clear. By the end of November, the Dow closed above 19,000 for the first time and many were calling it a “Trump rally.” The S&P 500 rallied 3.4% for November as a whole.

The gains were also a continuation of a long bull run during Barack Obama’s presidency.

1980: A high water month for a president-elect

A president-elect who, like Biden, enjoyed a massive market rally before taking office was Ronald Reagan in 1980.

The S&P surged over 10% in November 1980 after the former Governor of California defeated Jimmy Carter in a landslide victory.

UNITED STATES - NOVEMBER 20:  Jimmy and Rosalyn Carter, Nancy and Ronald Reagan in Washington, United States on November 20th , 1980.  (Photo by Francois LOCHON/Gamma-Rapho via Getty Images)
Ronald and Nancy Reagan meets with Jimmy and Rosalynn Carter on November 20, 1980 at the White House following the presidential election. (Francois LOCHON/Gamma-Rapho via Getty Images)

But that rally is a historical parallel that Joe Biden’s team will almost surely not want to emulate in full.

As it turns out, the market ended up peaking at the end of that November and then immediately went into a 2-year long bear market driven by a range of factors like oil prices and inflation.

On November 28, 1980, the S&P closed at 140.52. It wasn’t until almost 2 years later - Nov. 3, 1982 - that the index again closed above the 140 mark.

2008: The last time Joe Biden came into the White House

The worst November in recent history for a President-elect came when Joe Biden was the Vice-President elect.

The market fell 7.5% in November 2008. At one point - on Nov. 20, 2008 - the S&P closed down over 20% for the month and the lowest point for the index since 1997. The markets then rallied a bit in the final days of the month.

The declines that month were mostly attributable to the ongoing economic crisis. Markets dropped over 40% between May 2008 and March 2009 before embarking on a record-breaking bull run that only ended when the coronavirus struck.

U.S. President-elect Barack Obama (R) unveils his economic policy team during a new conference in Chicago November 24, 2008. From left are Treasury Secretary-designate Timothy Geithner, Council of Economic Policy-designate Christina Romer, National Economic Council Director-designate Lawrence Summers, Domestic Policy Director-designate Melody Barnes, Vice President-designate Joe Bidenand Obama. REUTERS/Jeff Haynes    (UNITED STATES)
President-elect Barack Obama and Vice president-elect Joe Biden unveil their economic policy team on November 24, 2008. (REUTERS/Jeff Haynes)

As President-elect Obama and Joe Biden announced their economic team on Nov. 24, 2008, Obama began by acknowledging the “economic crisis of historic proportions” and went on to discuss how “we need a recovery plan for both Wall Street and Main Street – a plan that stabilizes our financial system and gets credit flowing again” along with other issues.

Other new presidents in 1988, 1992, 2000

The months that Bill Clinton and George H.W. Bush won the presidency were mixed for investors. Clinton enjoyed S&P growth of 3% in November 1992 while the first Bush saw declines of 1.9% in 1988.

In those years, other economic factors appeared to be driving the market more than the new President-elect.

In 1988, after George HW Bush was elected to succeed Ronald Reagan, news reports at the time suggest that the Bush victory wasn’t a huge driver of stocks. A New York Times roundup of the market at the end of that month was described trading as “slow.”

In 1992, a Reuters story on the eve of Bill Clinton’s victory quoted an expert saying that stock gains had been "de-politicized." Although a New York Times column by Floyd Norris at the end of that year notes that a surge in stocks had begun around election day.

The disputed 2000 election saw markets drop over the course of that November but they moved without a President-elect in place as George W. Bush and Al Gore fought over Florida’s electoral votes.

Vice President Al Gore (R) meets with President-elect George W. Bush in the living room of the vice president's residence in Washington, December 19, 2000. Bush and Gore met for the first time since the final debate during the election campaign.
Vice President Al Gore (R) met with George W. Bush in Washington on December 19, 2000 after the election had been decided in Bush's favor. (Getty images)

Those declines - like most stock market movements during times of political unrest - can often be more fully understood based on larger economic trends. In 2000, the market had already been falling since March 2000 as the dot-com bubble burst and it had months to go – long after President Bush had been inaugurated – before they bottomed out.

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.

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