A central argument for Trump’s success is the rise in the stock market. How impressive is it? – Washington Post

A trader wears a hat in support of President Trump while working on the floor of the New York Stock Exchange, on Jan. 20, 2017. (Michael Nagle/Bloomberg)

From the confines of his luxurious resort at Mar-a-Lago on Saturday, President Trump tweeted a now-familiar case for his presidency.

“So many things accomplished” by his administration, Trump argued, leading that argument with the “record after record” being set in the stock market.

It is true, as Trump noted earlier this month, that the Dow Jones industrial average has hit more record highs over the course of 2017 than in any prior year. (While the fake news media may not have reported it, whatever that is, The Washington Post did.) But that’s an odd metric to use. The market could gain one-tenth of a point a day for a year and set a record for new highs, but see a lackluster 36.5-point gain overall.

In fact, Trump used to more regularly use another, more significant metric: the percentage increase in the market. Here’s a tweet from October:

As of the market close on Dec. 22, the Dow Jones industrial average had done better than that, up 35 percent since Trump’s inauguration. In February, White House counselor Kellyanne Conway claimed that the gain in the markets were an indicator that the markets “continue to like the policies, action, and vision” of Trump.

But there are a few points of context worth adding.

The first is that, since the Nov. 8, 2016 election, it isn’t just the Dow that’s seen an increase of 30 percent or more. Two Asia stock indexes, the Nikkei and the Hang Seng have increased 33.6 and 29.1 percent, respectively. Nor were all American indexes as successful: The Standard & Poor’s 500 only gained about 25.4 percent since its close on Nov. 8 — about the same as the German DAX.

Do the Germans and Japanese also “continue to like the policies, action, and vision” of Trump?

What’s more, the Dow is not the top-performing index of the six we looked at, considering only the period during which Trump’s policies were actually able to be implemented — that is, since his inauguration. The Hang Seng has grown by almost 30 percent since Jan. 20, while the Dow has gained a bit under 25 percent.

Why is the Dow doing so well? There are myriad factors, but it’s worth noting that it and several of the other indexes we looked at are experiencing a years-long bull market. Since Jan. 20, 2009 — the day Barack Obama was first inaugurated — the Dow is up about 212 percent. The S&P has done better, increasing by more than 233 percent. The DAX is up over 209 percent. The Nikkei is up more than 183 percent.

The comparison with Obama is interesting for another reason. Over an equivalent period of Obama’s first year in office, the Dow actually did better than it has done so far under Trump. Both presidents saw gains that were smaller than the one overseen by Franklin Roosevelt (and, happily, didn’t see the collapse Herbert Hoover suffered) but 234 market-days after Obama’s inauguration the Dow was up more than 31 percentage points. The same period during Trump’s (through Dec. 22) it gained 24.8 percent.

In fact, the Dow’s performance under Trump’s presidency isn’t that much better than George H.W. Bush’s first months in office, when it gained 21.3 percent.

In order for Trump to match Obama’s performance by the end of 2009, the Dow needs to hit 25,345.53 by its close on Friday. As of writing, it’s more than 580 points short of that.

If Trump really wanted to celebrate a massive spike in valuation, he could start tweeting about how well bitcoin is doing on his watch. Since inauguration, the Dow is up 24.8 percent. Bitcoin is up 1,742 percent.

In other words, had you invested $100 in a generic Dow fund on Jan. 20, you’d now have $124.80. If you’d invested $100 in bitcoin, you’d have more than $1,800. If you’d invested $100 in bitcoin on Election Day, you’d now have more than $2,300. If you’d invested $100 in bitcoin the day Obama was inaugurated, people would have asked how you invested in something that was about two weeks old as a concept. If you’d invested that amount on July 19, 2010, you’d now have over $19.5 million.

In retrospect, you should have done that.

Bitcoin’s rise, though, doesn’t really have anything to do with Trump. Many outside observers think that the spike in the value of bitcoin is a bubble, an artificial inflation that, at some point, will crash.

These things happen. In fact, just last year, a prominent political figure was arguing that the bull market in the Dow was itself a bubble. The exact wording used to criticize Obama’s economic policies was that the country was in “a big, fat, ugly bubble” with stocks that was “going to come crashing down.”

The person who said that was, of course, Donald Trump. To be fair, he never once criticized how many new Dow record highs had been set under Obama.

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