The steepest Inauguration Day bounce was FDR's: Click to enlarge.
Anyone expected a stock market bounce from the inaguration of President Barack Obama — and many apparently did — instead got the shock of the largest Inauguration Day drop ever. The market fell more than 4 percent yesterday.
But spikes or drops in the market on Inauguration Day are quite rare: only in 1933, when FDR delivered one of the most famous addresses in American history, did the Dow Jones Industrial Average register a significant change.
One reason Inauguration Day is relatively unimportant in trading is that there are no surprises — traders have already adjusted their portfolios to to fit the companies likely to be affected by the policies of the incoming administration.
But what about Election Day, when the likely results may not be obvious beforehand? Does that deliver a bounce? You might think that there would be significant market shifts as traders find out who their president will be. However, the Dow Jones index shows relatively little change.
Election Day on Wall Street: Click to enlarge.
Here are the charts for Inauguration and Election Day. If you want to play with historical Dow Jones returns, Yahoo! Finance has all the data.
t.finance.yahoo.com/table.csv?s=%5EDJI&d=0&e=21&f=2009&g=d&a=9&b=1&c=1928&ignore=.csv">data.
Comments
Discussions for this story are now closed. Please see the Community FAQ for more information.