Stock Market Indicators: S&P 500 Presidential Cycles

Stock Market Indicators: S&P 500

Presidential Cycles

Yardeni Research, Inc.

December 31, 2021

Dr. Edward Yardeni

516-972-7683 eyardeni@

Joe Abbott

732-497-5306 jabbott@

Please visit our sites at blog.

thinking outside the box

Table Of Contents Table Of Contents

Stocks & Politics

1

First & Second Terms

2

Presidential Cycles

3-4

S&P 500 Index & P/E

5

Misc.

6-7

December 31, 2021 / Stock Market Indicators: S&P 500 Presidential Cycles

Yardeni Research, Inc.



Stocks & Politics

Figure 1.

4815

4015 3215

S&P 500 DURING SIX-MONTH PERIODS AROUND PRESIDENTIAL ELECTIONS (weekly, ratio scale)

2415

1615

815

Dec 4815 4015 3215 2415 1615

815



3.5 -8.9 11.4 6.8 -0.7 0.5 -3.0 7.3 8.7 10.5 7.1 21.3 -18.3 9.0 -42.7 7.7 8.9

15

15

51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17 19 21 23 25

Note: Shaded areas in green (red) are when the S&P 500 is up (down) during the six months from September to February around presidential elections. Numbers above timeline are percentage changes over those six-month periods. Source: Standard & Poor's.

Figure 2.

6004

5004

FDR

4004

HST

3004

2004

DDE

JFK

RMN JEC

LBJ

GRF

S&P 500 INDEX* & PRESIDENTS

1004

BLUE DEMOCRATS vs. RED REPUBLICANS

(ratio scale)

RWR GHWB

WJC

GWB

BHO

6004 DJT Dec 5004

4004 3004

2004

1004



285.6

118.7

78.7

3.5 26.3

220.9

203.0

-31.6

140.3 71.2

4

4

30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

* End-of-month daily data. Note: Blue (red) shades represents Democrats (Republicans) in White House. Data above timeline are percentage changes in S&P 500 for each shade. Source: Standard & Poor's.

Page 1 / December 31, 2021 / Stock Market Indicators: S&P 500 Presidential Cycles

Yardeni Research, Inc.



Figure 3.

5004 4004 Roosevelt 3004

2004

First & Second Terms

Eisenhower Kennedy Nixon

Truman

Johnson Ford

Carter

Bush I

Bush II Obama

Reagan

Clinton

TrumpDec

5004 4004

3004

2004

1004

1004

S&P 500 INDEX* & PRESIDENTIAL FIRST TERMS

(ratio scale)



149.3

74.8 75.6

45.8 13.7

26.3 23.2

56.9 70.0

-8.2

57.9

4

4

30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

* End-of-month daily data through 8/31/2016. Note: Shaded areas represent first term of each president. Blue shade represents Democrats. Red shade represents Republicans. Data above timeline are percentage changes for each shade. Source: Standard & Poor's.

Figure 4.

4904

4204 3504

Roosevelt

2804

2104

1404

Eisenhower

Nixon

Reagan

S&P 500 INDEX* & PRESIDENTIAL SECOND TERMS

704

(ratio scale)

Clinton Bush II Obama

Dec

4904 4204

3504

2804

2104

1404

704



-38.4

24.5

-9.0

66.1

78.2 -25.5 52.2

4

4

30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

* End-of-month daily data through 8/31/2016. Note: Shaded areas represent second term of each president. Blue shade represents Democrats. Red shade represents Republicans. Data above timeline are percentage changes for each shade. Source: Standard & Poor's.

Page 2 / December 31, 2021 / Stock Market Indicators: S&P 500 Presidential Cycles

Yardeni Research, Inc.



Presidential Cycles

Figure 5.

44290033

3503

2803

S&P 500 INDEX* &

2103

FIRST YEAR OF PRESIDENTIAL TERMS: 1928-now

1403

(average = 5.2%, ratio scale)

703

Dec 44290033 3503 2803 2103 1403

703



-11.9 46.6 -38.6 -17.9 30.7 10.3 -6.6 -14.3 23.1 9.1 -11.4 -17.4 -11.5 -9.7 26.3 27.3 7.1 31.0 -13.0 3.0 23.5 29.6 3

25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15 20

* End-of-month daily data through 12/31/2016. Note: Shaded areas are the first years of presidential terms. Data above timeline are percentage changes for the first year using daily price data. Source: Standard & Poor's.

3 25

Figure 6.

44290033 3503

2803

S&P 500 INDEX* &

2103

SECOND YEAR OF PRESIDENTIAL TERMS: 1928-now

1403

(average = 4.8%, ratio scale)

703

Dec 44290033 3503 2803 2103 1403

703



-28.5 -5.9 25.2 12.4 -11.9 21.8 45.0 38.1 -11.8 -13.1 -0.1 -29.7 1.1 14.8 14.6 -6.6 -1.5 26.7 -23.4 13.6 12.8 11.4

3

3

25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15 20 25

* End-of-month daily data through 12/31/2016. Note: Shaded areas are the second years of presidential terms. Data above timeline are percentage changes for the second year using daily price data Source: Standard & Poor's.

Page 3 / December 31, 2021 / Stock Market Indicators: S&P 500 Presidential Cycles

Yardeni Research, Inc.



Presidential Cycles

Figure 7.

44290033

3503

2803

S&P 500 INDEX* &

2103

THIRD YEAR OF PRESIDENTIAL TERMS: 1928-now

1403

(average = 12.8%, ratio scale)

703

Dec 44290033 3503 2803 2103 1403

703



3 25

-47.1 41.4 -5.5 19.4 0.0 16.5 26.4 8.5 18.9 20.1 10.8 31.6 12.3 17.3 2.0 26.3 34.1 19.5 26.4 3.5 0.0 -0.7 30 35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15 20

* End-of-month daily data through 12/31/2016. Note: Shaded areas are the third years of presidential terms. Data above timeline are percentage changes for the third year using daily price data. Source: Standard & Poor's.

3 25

Figure 8.

44290033 3503

2803

S&P 500 INDEX* &

2103

FOURTH YEAR OF PRESIDENTIAL TERMS: 1928-now

1403

(average = 5.7%, ratio scale)

703

Dec 44290033 3503 2803 2103 1403

703



3 25

-15.1 27.9 -15.3 13.8 -0.7 11.8 2.6 -3.0 13.0 7.7 15.8 19.1 25.8 1.4 12.4 4.5 20.3 -10.1 9.0 -38.5 13.4 9.5 30 35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15 20

* End-of-month daily data through 12/31/2016. Note: Shaded areas are the fourth years of presidential terms. Data above timeline are percentage changes for the fourth year using daily data. Source: Standard & Poor's.

3 25

Page 4 / December 31, 2021 / Stock Market Indicators: S&P 500 Presidential Cycles

Yardeni Research, Inc.



Figure 9.

4850

4250

Kennedy

3650

Johnson

3050

(+69.6)

2450

1850

Nixon Ford (+1.3)

S&P 500 Index & P/E

Carter (+27.9)

Reagan Bush I (+229.7)

Clinton (+209.9)

Bush II (-40.0)

1250

S&P 500 INDEX* & PRESIDENTS' PARTIES (weekly, ratio scale)

650

Obama (+140.3)

Trump

12/31

4850 4250 3650 3050

2450

1850

1250

650



50

50

60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

* End-of-month daily data through August 31, 2016. Note: Shaded areas represent periods when one party holds the presidency. Blue shade represents Democrats. Red shade represents Republicans. Numbers in parenthesis show S&P 500 increase or decrease during each president. Source: Standard & Poor's.

Figure 10.

28

28

27 S&P 500 FORWARD P/E RATIO*

27

26 25 Carter

Reagan

Bush I

Clinton

Bush II

Obama

26 Trump 25

24

24

23

23

22

22

Dec

21

21

20

20

19

19

18

Average = 14.2

18

17

17

16

16

15

15

14

14

13

13

12

12

11

11

10

10

9

9

8

8

7

7

6

6

5

5

77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22

* Average monthly S&P 500 stock price index divided by S&P 500 12-month forward consensus expected operating earnings per share. Source: Thomson Reuters I/B/E/S.

Page 5 / December 31, 2021 / Stock Market Indicators: S&P 500 Presidential Cycles

Yardeni Research, Inc.



Figure 11.

33445050500000033333 2503 2003 1503 1003

503

Misc.

S&P 500 INDEX* & FIRST YEAR OF FIRST PRESIDENTIAL TERMS: 1928-now

(average = 6.4%, ratio scale)

Dec 33445050500000033333 2503 2003 1503 1003

503



-11.9 46.6

10.3 -6.6

23.1 9.1 -11.4 -11.5 -9.7

27.3 7.1

-13.0

23.5

3

25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 00 05 10 15 20

* End-of-month daily data through 12/31/2016. Note: Shaded areas are the first years of presidential terms. Data above timeline are percentage changes for the first year using daily price data. Source: Standard & Poor's.

3 25

Figure 12.

25

25

FDR Eisenhower Kennedy Nixon Carter Reagan

Clinton Bush II Obama Trump

Truman

Johnson Ford

Bush I

20

20

Nov

15

15

10

10

PAYROLL EMPLOYMENT & PRESIDENTS

5

BLUE DEMOCRATS vs. RED REPUBLICANS

5

(120-month change)

0

0



-5

-5

46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

Note: Blue (red) shades represents Democrats (Republicans) in White House. Source: Bureau of Labor Statistics.

Page 6 / December 31, 2021 / Stock Market Indicators: S&P 500 Presidential Cycles

Yardeni Research, Inc.



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