WORST FEARS

Trump as Stock Market Bogeyman

Republican U.S. presidential candidate Donald Trump shows off the size of his hands as Fox News Channel moderators Brett Baier (L) and Megyn Kelly (R) look on at the U.S. Republican presidential candidates debate in Detroit, Michigan, March 3, 2016. REUTERS/Rebecca Cook
Donald Trump may not care what others think, but stock markets do.
  • Why it matters

    Why it matters

    It’s a scary time in the deeply polarized United States, where many voters are guided by anger and frustration, and not the issues. That’s what really worries stock markets.

  • Facts

    Facts

    • Following the 14 Super Tuesday primaries, Donald Trump has built a commanding lead over the divided GOP field.
    • Some Republican conservatives are considering a third party option if Mr. Trump wins the nomination.
    • The next big test is March 15, when primaries will be held in the crucial states of Florida, Ohio, North Carolina, Missouri and Illinois.
  • Audio

    Audio

  • Pdf

U.S. investors understandably tend to love capitalism and its mantra of a free market. They typically hate anti-business social programs and tax increases. It’s why, in American politics, investors generally scorn free-spending Democrats and favor presidents from the ranks of fiscally-minded Republicans.

For many this assumption has come to be a stock market rule. Actually, it’s all wrong.

Since the beginning of the 20th century, the S&P 500 stock index in the United States has increased 10 percent annually on average when Democrats are in the Oval Office. With Republican presidents, according to calculations by Fidelity financial services, share prices rose by barely 2 percent a year.

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