The US stock market has seen better performance during Biden’s first 100 days in office than with any other president over the last 75 years. This is according to data released by JP Morgan. Analysts from the bank also believe that the White House’s tax policies and increased stimulus plans could have more positive effects on the markets moving forward.
The record stimulus spending seen during Biden’s first 100 days has pushed equity markets towards record highs. For someone who was labeled as “sleepy Joe” by the Trump campaign and the right-wing media, this performance during the first 100 days should come as a huge boost for Biden's competency in the economy.
The S&P 500 has returned up to 25% since the election of Joe Biden as the President of the United States. This is relatively higher compared to the 15% recorded by the former Trump administration in its first 100 days. The analysts also noted that the S&P returns during Biden's first 100 days are more than double the retrains posted by Republican presidents since World War II.
It was only JF Kennedy who came close to Biden’s record with a 20% gain during his 100 days in office. Despite this, JP Morgan analysts aren’t fully confident that the current trajectory will hold. Although so far Biden’s policies have proven very good for the market, likely, future policy direction doesn’t have so much sway. For example, the Biden administration is rumored to be planning a massive hike in capital gains taxes.
If the proposal goes through, the tax rate could go as high as 43.4%, almost double what we have now. This could send shocking ripple effects across the markets. There’s also a plan by the Biden White House to also increase corporate taxes in an effort to fund an ambitious infrastructure spending bill. All these policy directions may affect corporate earnings, something that will ultimately affect the markets.
However, it is not believed that tax changes will drive any big shifts in the market. There is hope that the widespread vaccination program undertaken by the Biden team will help shore up the US economy over the coming months. Even as increased taxes limit corporate earnings, JP Morgan analysts believe that this robust economic environment will play a key role in maintaining growth in the markets.
The analysts are, however, not worried about any radical changes in the way of doing things. Biden has managed to cast himself as a moderate Democrat and has resisted calls from some of the most radical members of his party to engage in far-left policy interventions.
Although the right-wing media and the Trump campaign had tried to label Biden as a bad thing for the markets, it seems the president has managed to prove people wrong, at least for now.