Ridin' the markets with Biden?

So much is made of the first 100 days of a Presidential term and Biden has already started his term with a bunch of executive orders and a high profile agenda already set ahead of yesterdays inauguration - Covid and the economy.

Within the world of investing, 100 days is surely short-termism. True, but there is an interesting phenomena around market activity during the first 100 days. Usually, if they do well, there is a phrase attached like the "Trump Bump" or the "Obama Bounce". Can we expect a "Biden Bounce"? Certainly, "Bidenomics", which is the usual practice of amalgamating of a Presidents surname with the word "economics" seems to have a catchier ring to it this time around.

Usual caveat of past performance is no guarantee, let's take a look at the last 20 years of Presidential terms first 100 days. I've gone for 20 year data as this captures the growth of algo-trading and a now mature ETF market which has had a significant impact on markets, not least because of the sheer volume that is now traded.

Source: measuringworth.com

The table above shows the AGRs for the first 100 trading days of a Presidential term for the core US equity indices. Ranges 1&2 are George W. Bush's first and second terms, 3&4 is Barack Obama's first and second terms and 5 is Donald Trump's recent term.

George W. Bush's first term started in the dotcom bust and this is clearly evidenced in the -62% decline of the NASDAQ. The less tech dominated S&P 500 was poor too, while the DJIA without dotcom influence actually showed positive growth over Bush's first term. The second term also had a negative first 100 days and then by the end of his tenure in office, Bush passed over the baton to Obama during the credit crisis. Perhaps it is unfair to judge Bush on his economic record given it was bar-belled by two separate crises.

Since that era, the first 100 days of a Presidential term has seen significant double digit growth across the US equity markets (as proxy). The best growth from the first 100 days was seen during the Obama Presidency when of course Biden was VP.

So 100 days is short-termism and yes it is a simple way of looking at it, however does this present a tactical opportunity to participate in a Biden Bounce? We will find out by April 30.