Why Joe Biden proved to be Best US President in last 75 Years for Traders

Joe Biden is the newly elected President of the United States of America. He is the 46th President of the United States and is considered to be the best President for stock market traders compared to the President’s of the last 75 years. Let’s look at why Joe Biden is considered to be the best President for the traders.

U.S Stock Market
Returns
Reason
Earnings
FAQ

U.S Stock Market

In the first 100 days of Joe Biden’s Presidential rule in the United States, the stock market of the country has provided better returns compared to any other President from the past 75 years. The data was provided by JP Morgan.

JP Morgan’s analysts that were led by John Normand reviewed the administration performance of Joe Biden since the day of the inauguration and discussed on how the various policies on tax and the programmes related to spending could move the markets in the coming months. This was discussed on 23 April 2021 in a note to the company’s clients.

The analysts said that the record fiscal stimulus had increased the returns on equity to all-time highs in the first 100 days of Joe Biden’s rule. They added on to the note saying that the results are not bad for Biden whom Donald Trump had labeled as Sleepy Joe during the election campaign.

Returns

The returns provided by the S&P 500 after 100 days of Joe Biden’s Presidential rule are around 25% for the first 100 days from the day of inauguration. When compared to the returns received after the former President Donald Trump’s Presidential rule was below 15 % for the first 100 days from the day of inauguration.

The data from JP Morgan showed that the average S&P 500 returns on equity of the Democratic Presidents were more than double the average returns provided by the Presidential rule of Republicans since the end of World War II.

The highest returns which were received by any President for the first 100 days mark previously was by President John F Kennedy which was more than 20 %.

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Reason

JP Morgan added on saying that the Biden’s policies since the day of the inauguration have benefited the market. This was because the proposed policies of Joe Biden were undoubtedly positive. Joe Biden has also planned to increase the capital gains to nearly double as much as around 43 % for the wealthy Americans.

The JP Morgan team said that there would be a drag on the market in the year 2021 due to the hikes on the taxes for corporations and individuals in order to fund spending on social and infrastructure with a strict regulatory environment.

Earnings

The JP Morgan team added that they did not expect that the increases in the tax would cause a big dip in the earnings. The view since the campaign of 2020 has been that a higher rate on corporate is expected to reduce the Earnings Per Share of S&P 500 by many dollars.

But within a sudden growth in the earnings environment which is because of the higher tax rates and the reopening because of the vaccine drives. The strategists of JP Morgan with regards to the US equity have checked and expanded the original analysis this week which shows that there is no change to the target of the 4400 mark by the end of this year in the S&P 500.

JP Morgan said that an increase in the capital gains tax rate in 1986 from 20% to 28% and 2013 from 15 % to 25 % had led to about 5 % drawdowns in a month in the equity market before the new codes coming into effect.

But the analysts said that it is a sample size that is smaller and the Tax Reform Act of 1986 had lower individual and corporate rates. The analysts added that overall, from the Biden’s tax policies they expected that it would increase a continuous rotation into the value based stocks that would be far from the big growth companies and the tech companies. This would be instead of a downturn in the market.

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FAQ

What is the Net worth of Joe Biden?

The president of America is paid a $400,000 a year; on top of that, they receive an extra $50,000 expense allowance, a $100,000 non-taxable travel account and $19,000 for entertainment.

How old is Joe Biden?

The age of Joe Biden is 78 years.

Who is the wife of Joe Biden?

Joe Biden's wife is Jill Biden.

Conclusion

The view of JP Morgan has been supported by the UBS Global Wealth Management. They have informed their clients in a note in the month of April that they had not found any correlation between the valuations of equity markets and tax rates on capital gains.