Figures Do Not Support Donald Trump As Market Favorite

US President Donald Trump, who is pursuing his second term as a Republican Party candidate, is considered by many the favorite candidate for the stock market. Investors are attracted by the high regard he shows Wall Street in making economic decisions.

However, the reality is that the fickle way in which he politicizes social networks, especially Twitter, has impacted on stock performance and limited market progress, despite his empathy with investments because of his entrepreneurial vision. This is clearly seen when comparing the earnings in his tenure with those of his predecessor.

Contrasts in numbers

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Since the beginning of the Donald Trump administration until the most recent day, the Dow Jones index, made up of 30 industrial giants, has moved 43.37% from a level of 19,827.25 points to 28,425.51 units. The S&P 500, 51.76% from 2,271.31 to 3,446.83 points. The Nasdaq, 105.6% from 5,555.33 points to a level of 11,420.98 points.

In the second presidential term of Democrat Barack Obama, the Dow Jones index moved from 13,245.68 units to 19,827.25 units, with a gain of 11.30 percent. The S&P 500 rose 12.45% from 1,428.39 to 2,271.31 points. The Nasdaq technology moved 84.44% from a level of 5,555.33 units to 11,420.98 units.

In the analysis, two of the main Wall Street indexes registered higher growth in the presidential term of Barack Obama, while in that of Donald Trump the technology sector grew more, despite the constant conflicts between the governments of the United States and China. The latter was due to the explosion of the sector itself.

For Ángel Amancio, a trader with institutional experience in Madrid and New York, the performance of the stock market during Trump’s term can receive two analyzes. “On the one hand, Trump is an entrepreneur and focuses on helping companies with tax issues, on the other, high volatility is the order of the day,” said the analyst.

He affirmed that their numbers reflect slightly lower rhythm than with Obama precisely because of this factor. “Their lawsuits with China have affected, but the technology sector had a better performance due to the explosion of the sector. We must also take into account the pandemic, which despite being a negative factor does not leave it so far behind Obama, “he added.

Average earnings

Among other actions, Trump cut taxes and thereby boosted markets. It removed the United States from the Paris Agreement and freed its companies from environmental obligations. In addition, the fact that its position is in favor of business support increased its popularity in this area, despite the fact that for many investors it is not the ideal option.

As for the average earnings, in the second presidential term of Barack Obama, the Dow Jones gave average earnings of 11.30% per year; The S&P 500 returned 12.68% annually, and the Nasdaq was up 16.24 percent. With Trump, the average for the main index was 10.25%; the S&P 500 gained 11.76%, and the Nasdaq averaged 20.72% a year.

For Jorge S. Soto, a finance teacher from the Universidad del Valle de México, seeing the market in the Trump period implies an analysis that separates the rest of time and the crisis period due to Covid-19. The pandemic was a factor that changed the course of all assets drastically, he explained.

“The fact that the figures are lower with Trump tells us that in his period he faced the pandemic and this also explains the rise of technology. We know that he is a businessman and the benefits he gives to companies have placed him as the markets candidate, “he said.

Regarding the volatility caused by his comments, he said that the market has adapted to this way of acting. A change in the presidency would mean greater uncertainty, since the platform that Biden has for the sector is not yet clear, he said.

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