Good or just lucky, Joe Biden’s first three weeks in the stock market have been historically solid ones when measured against newly elected presidents of the past.
“Markets are looking at Biden’s actions, and so far, they like them,” said Yousef Abbasi, global market strategist at StoneX.
To be sure, the president-elect has been the beneficiary of some fortuitous tailwinds, most notably data suggesting various Covid-19 vaccines hold promise. In the meantime, he’s getting no help from valuations — which at 22 times forward earnings and 2.7 times sales are some of the highest multiples ever recorded — never mind just for a new presidency.
“That combination of relief politically as well as positive surprises on the health-care front really surprised the market in a good way,” said Wayne Wicker, chief investment officer at Vantagepoint Investment Advisers. “Coming into the month, people were quite concerned with the presidential election. I don’t think anybody was planning on such a blockbuster month.”
Trump this week, in a brief appearance, touted the Dow Jones Industrial Average’s first-ever rally above 30,000. Along with vaccine optimism, the index was aided by some of Biden’s appointments, mainly Janet Yellen, who’s seen as embracing stimulus as Treasury secretary.
Angelo Kourkafas, investment strategist at Edward Jones, noted that markets are also welcoming of Biden’s more inclusive foreign-policy outlook and are expecting less headline volatility when it comes to trade relations.
“We’ve seen some reduction in political-uncertainty risk,” he said in an interview. “If we are able to maintain the current favorable environment while at the same time reduce some of the headline risk with trade, that’s probably a good outcome for the markets.”