What a historic day on January 20th, 2009. A dream comes true, a non-Caucasian, took over the President office of America. To American, I salute you for demonstrating to the world, EQUAL means EQUAL.
Stock market however greeted Obama with an equally historic moment. Dow dropped by almost 4% making it the worst drop on the 1st day of a new President sworn in since 1953. This is not a surprise during severe bear market but much more worse than the past. Dow dropped by 0.72% when Nixon sworn in. In 1974, the market dropped by 0.96% when President Ford took over the office and in one of the more severe declined after the American has a lost decade was Reagan - the market greeted him with 2.1% drop but of course that was the beginning of a new great multi-year bull run.
How did the stock market perform in the first 100 days in those bear market under a new President? In 1973, the stock market declined by 9.58%, almost flat in 1974 and rose 4.72%in 1981.
Given such a pessimistic environment and attractive valuation, will the market bounce back? Your guess is a good as mine. Have a great day.
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