November 6, 2018 / 6:01 AM / 13 days ago

GRAPHIC-Two years in, Trump holds stock market bragging rights

    By Noel Randewich
    SAN FRANCISCO, Nov 6 (Reuters) - U.S. President Donald Trump
has taken credit for the stock market's gains during his nearly
two years in the White House, and those claims are reasonable
given the impact of tax cuts and pro-business policies on
investor sentiment. 
    The S&P 500 has risen 28 percent since Trump's election in
November 2016 to the eve of congressional midterm elections on
Tuesday. This surpasses the market's performance over the same
time frame under any other president in the past 64 years. Under
President Dwight Eisenhower, the S&P 500 rose 29 percent from
his election in November 1952 through November 1954. 
    Sweeping corporate tax cuts, an initiative driven by Trump, 
supercharged U.S. companies' earnings and helped lift the
cash-rich technology sector. The Republican party last year
passed the biggest overhaul of the U.S. tax code in over 30
years, boosting U.S. corporate earnings. 
    Still, other sectors that could have been expected to
benefit strongly from a Trump presidency have lagged. Indeed,
the individual stocks that have gained and lost the most during
his reign have little discernable link to Trump's presidency. 
    How the market shakes out in the final two years of Trump's
presidency will probably be influenced by Tuesday's elections.
Analysts expect pressure on stocks if Democrats gain control of
the House of Representatives and a sharper downward reaction if
they sweep the House and Senate. 
    On the contrary, if Republicans hold their ground, stocks
could gain further, with hopes of more tax reform ahead.

    The following graphics show how the Trump presidency has
played out on a macro and micro level: 
    
         
    
    Trump's strong stock market record has been maintained even
after a recent pullback on Wall Street as worries about trade
battles, inflation and rising interest rates have increased
caution among investors. Starting in 2010 under President Barack
Obama as the world recovered from the financial crisis, the S&P
500 has enjoyed its longest bull market in history.
    With more than half of Trump's presidency still to come, how
the market will perform over his whole term is unknown.
Democratic President Bill Clinton saw the S&P 500 triple during
his two terms in the White House. (See graphic tmsnrt.rs/2jtEpzi)
    Average S&P 500 company earnings per share are on track to
rise 24 percent this year, the strongest annual gain in eight
years, according to IBES data from Refinitiv.
    Investor confidence stemming from the tax cuts and Trump's
other business-friendly policies so far have more than made up
for ongoing worries on Wall Street that his trade conflict with
China is hurting the U.S. economy, and that it could become
worse.
    The tax cuts also led Apple and other
multinationals in the technology sector to repatriate billions
of dollars in profits held overseas, some of which went toward
buying back stock and sending Wall Street higher. 
    The S&P 500 information technology index has
gained 51 percent since Trump's election. Financials,
which benefited from Trump's deregulation of the banking
industry, have climbed 34 percent since Nov 8, 2016.
    
         
    
    Still, some companies that had been expected to boom under
Trump have fared poorly. The S&P 500 energy index is
flat since Trump's election, even though crude prices
rose over 50 percent during that time and despite Trump putting
the brakes on Obama-era policies aimed at reducing the country's
reliance on oil.  
    
         
 
    Semiconductors have fared better than any other industry
group, even though they are highly exposed to China and could
become casualties in Trump's trade war with Beijing. 
    Along with telecommunications, food and tobacco companies,
automakers on average have fared worst among 27 industry group's
since Trump's election. General Motors Co and Ford Motor
Co have been wrestling for years with tepid global demand,
with recent signs of a deep slowdown in China.
    Industry groups are more detailed categories than the 11
sectors widely tracked on the stock market. 
    
         
    
    Interest rates, economic growth, company earnings and
inflation are widely viewed as strong influences on stock
prices, making who holds power in Washington just one of many
factors affecting investor sentiment.
    Abiomed Inc, the S&P 500's top performer since
Trump's election, has jumped over 260 percent, helped in part by
the success of its Impella heart pumps. 
    General Electric's 68 percent loss makes it the S&P
500's worst performer since Trump was elected. The former
industrial powerhouse has foundered in several key markets in
recent years and is aggressively cutting costs and selling
businesses.

    
 (Reporting by Noel Randewich; Editing by Megan Davies and
Cynthia Osterman)
  
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