Bull in a China Shop. The S&P 500 Index After 100 Days of TrumpPresident Donald Trump's first 100 days in office were the worst for the stock market in any postwar four-year U.S. presidential cycle since the 1970s.
The S&P 500's 7.9% drop from Trump's inauguration on Jan. 20 to the close on April 25 is the second-worst first 100 days since President Richard Nixon's second term.
Nixon, after taking office as President of the United States (for the second time) on January 20, 1973, witnessed the S&P 500 index fall by 9.9% in his first 100 days in office, due to the unsuccessful economic measures he took to combat inflation, which led to the recession of 1973-1975 when the S&P 500 index losses of nearly to 50 percent.
It all started in January 1973 in the best soap opera traditions of Wall Street, at the historical peaks of the S&P 500 index..
..But less than two years later it quickly grew into a Western with a good dose of Horror, because the scenario of a 2-fold reduction of the S&P 500 index was unheard those times for financial tycoons and ordinary onlookers on the street, since the Great Depression of the 1930s, that is, for the entire post-war time span since World War II ended, or almost for forty years.
Nixon later resigned in 1974 amid the Watergate scandal.
On average, the S&P 500 rises 2.1% in the first 100 days of any president's term, according to CFRA, based on data from election years 1944 through 2020.
The severity of the stock market slide early in Trump's presidency stands in stark contrast to the initial "The Future is Bright as Never" euphoria following his election victory in November, when the S&P 500 jumped to all-time highs on the belief that Mr. Trump would shake off the clouds, end the war in Ukraine overnight, and deliver long-awaited tax cuts and deregulation.
Growth slowed and then, alas, plummeted as Trump used his first days in office to push other campaign promises that investors took less seriously, notably an aggressive approach to trade that many fear will fuel inflation and push the U.S. into recession.
The S&P 500 fell sharply in April, losing 10% in just two days and briefly entering a bear market after Trump announced “reciprocal” tariffs, amid a national emergency that gave him free rein to push through tariffs without congressional oversight.
Then Trump began yanking the tariff switch back and forth, reversing part of that tariff decision and giving countries a 90-day window to renegotiate, calming some investor fears.
Many fear more downside is ahead.
Everyone is looking for a bottom. But it could just be a bear market rally, a short-term bounce of sorts.
And it's not certain that we're out of the woods yet, given the lack of clarity and ongoing uncertainty in Washington.
Time will tell only...
--
Best 'China shop' wishes,
@PandorraResearch Team
