January Charts of Interest: Presidential Stock Market Scorecard

Given Monday’s inauguration, I kick off this month’s charts of interest by examining how the stock market has performed under past presidents. I then discuss how U.S. stocks are now dominating global indexes, growth in the number of complex ETFs and rising home contract cancellations, before finishing with whiskey—yes, whiskey but not whisky. (There is a difference.)

As a reminder, charts of interest highlights charts and tables I’ve come across that have not made their way into other AAII commentaries but provide insights about the financial markets and the economy.

Stocks Have Risen Under Most Presidents

While both President Donald Trump (first term) and former President Joe Biden can accurately claim that stocks rose during their tenure, most past presidents can also do the same. Since the late 19th century, stocks have risen under most presidents, as this chart from Carson Group’s Ryan Detrick shows. Only six presidents have had stocks fall under their tenure.

“We Are the World”

U.S. investors looking at global index funds might start singing the 1985 song referenced above. American stocks now account for three-quarters of the MSCI World index’s allocation. Topdown Charts’ Callum Thomas says the current weighting is now bigger than it was during the 1970s Nifty Fifty era.

If You Can’t Beat Them, Become More Complex

The market share for exchange-traded funds (ETFs) that track the best-known indexes is dominated by BlackRock (iShares), State Street and Vanguard. Most sectors, major industries and commonly followed factor strategies are also covered by established ETFs. To find avenues for new funds, Wall Street has gotten creative: “About 30% of ETFs launched in the U.S. in 2024 referred to some complex strategy in their names,” according to The Wall Street Journal.

A Record Number of Canceled Home-Purchase Agreements

Nearly 40,000 home-purchase agreements were canceled in December 2024. This was the highest number of December cancellations since at least 2017, according to Redfin’s Lily Katz.

To put the percentage in perspective, it equated to 16.2% of homes that went under contract that month. To be fair, some of the homes contracts were canceled on could have gone under contract in November. Nonetheless, the high cancelation rate reflects the impact that rebounding mortgage rates are having.

Whiskey Sales Are Drying Up

U.S. whiskey sales volume declined for a second consecutive year in 2024. It had previously risen every year between 2002 and 2022.

The Wall Street Journal cites a combination of a post-pandemic drop in spending, a shift toward lower-cost brands, and “the growing popularity of anti-obesity drugs, cannabis, and low- and no-alcohol drinks.” I’m partially to blame for letting my bottle of Woodford Reserve bourbon sit too long in the cabinet.

Optimism among individual investors about the short-term outlook for stocks increased in the latest AAII Sentiment Survey. Meanwhile, neutral sentiment and pessimism decreased.

Bullish sentiment, expectations that stock prices will rise over the next six months, increased 18.0 percentage points to 43.4%. Optimism is above its historical average of 37.5% for the first time in four weeks.

Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, decreased 6.9 percentage points to 27.1%. Neutral sentiment is below its historical average of 31.5% for the 27th time in 29 weeks.

Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 11.1 percentage points to 29.4%. Pessimism is below its historical average of 31.0% for the second time in 10 weeks.

The bull-bear spread (bullish minus bearish sentiment) increased 29.1 percentage points to 14.0%. The bull-bear spread is above its historical average of 6.5% for the first time in five weeks.

This week’s special question asked AAII members what, if any, changes they expect to make to their portfolios this year.

Here’s how they responded:

• Focus more on portfolio income (more in dividend-paying stocks, more in bonds, etc.): 30.2%
• No changes anticipated: 28.9%
• Allocate more conservatively (more in bonds, more in cash, etc.): 19.5%
• Invest more aggressively (more in stocks, more in growth stocks, etc.): 17.5%
• Other: 3.4%