Presidents' Day Express

U.S. markets are closed for the Presidents Day holiday and we are off, but here are some presidential thoughts.

The Express | Insight Before the Bell By Caleb Silver, Editor in Chief & Deborah D'Souza, News Editor Hello Readers: U.S. markets, banks, and government offices are closed today in honor of President's Day here in the U.S., and we are taking the day off as well. We did want to leave you with a few thoughts around presidents and markets for your consideration.     Image courtesy: NPS.gov  Presidents get a lot of the blame, and take a lot of the credit, for the performance of the stock market while they are in office. However, the truth is that a president's ability to impact the economy and markets is generally indirect and marginal.   It is Congress that sets tax rates, passes spending bills, and writes laws regulating the economy. That said, there are some ways that the president can affect the economy and the market. Because the president can interpret laws, they have some control over business and market regulation. This control can be direct or through the president's ability to appoint cabinet secretaries, such as the head of the Commerce Department, as well as trade representatives.   The president also nominates the Chair of the Federal Reserve, who sets monetary policy along with the other Fed governors and members of the Federal Open Market Committee. The Fed is an independent government body with a mission to set monetary policy that ensures economic growth, low inflation, and low unemployment. Those monetary policy measures can impact the stock market, although the Fed typically does not consider the performance of the stock market as an isolated factor to influence its decisions. The extent to which the person picked as Fed Chair is hawkish or dovish on monetary policy will determine how they affect the economy.   All presidents would like to lead during times of economic expansion and a rising stock market because those usually increase their likelihood of reelection. As President Bill Clinton's campaign manager, George Carville, once famously said, "It's the economy, stupid."   This chart shows the S&P 500's price change over each 4-year presidential term going back to 1953. Two of the terms have two names because President Kennedy was assassinated before the end of his term, and President Nixon resigned before the end of his second term. Their terms were finished out by their vice presidents, Lyndon Johnson, and Gerald Ford, respectively.     There are a whole lot of bull markets in that chart.    CEO Presidents There haven't technically been any CEOs who went on to become president. Donald Trump is the closest contender to claim that title. He was Chairman and President of The Trump Organization before becoming President of the United States, and that's pretty close. Many have tried, and we'll certainly see many more make the attempt in the future.   Here's a list of five former CEOs who made a run at the Oval Office.   Presidents and the NYSE It's very rare that a sitting president will visit the New York Stock Exchange. Sure, President George Washington's statue is right across the street at Federal Hall, but the Exchange wasn't even around during his tenure. It's an iconic image, though.   image courtesy nps.gov     President George W. Bush visits the NYSE On January 7, 2007, President George W. Bush paid a visit to the New York Stock Exchange. He had just made a speech on the economy across the street at the aforementioned Federal Hall, where he chastised corporations for excessive executive compensation. Little did he know, the nation was about to slip into a financial crisis and the steepest recession it had experienced since the Great Depression. Here is a great photo from that day, courtesy of the White House archives.     Presidential Salaries Relatively speaking, presidential salaries are pretty tame. Presidents make their money when they get out of office with lucrative book deals and speaking fees.   Here's a good analysis of presidential pay from our friends at TheBalance.com.     I'm out this week and Deb has the wheel. Talk to you soon.   Caleb More Coverage: Is It Time to Buy Nike Stock? Nike's long-term uptrend is showing no signs of topping out, but the stock is overdue for a correction. Read Now »   Gilead Sciences Stock at Cusp of New Uptrend Gilead Sciences stock has completed a massive double bottom, setting the stage for an uptrend that catches market watchers off guard. Read Now »   AMD Beats Earnings Estimates and Shares Set New High Shares initially slumped on weak guidance but then recovered. With a steep valuation, this is not a stock for value investors. Read Now »   Shopify Stock Moves Further Into Overbought Territory Shopify shares moved sharply higher Wednesday after the company reported better results than even the most bullish analysts expected. Read Now »   How can we improve The Express? Tell us at theexpress@investopedia.com Enjoy The Express?  Copy and share the link below to invite friends to sign up: https://link.investopedia.com/join/53o/00-fwd-theexpress CONNECT WITH INVESTOPEDIA Email sent to:  geezers.mail@gmail.com To update your newsletter preferences or unsubscribe, click here.   114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC. All Rights Reserved | Privacy Policy