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Wall Street expects Dow Jones Industrial Average (^DJI) to break above $40,000 under Biden administration, while stock indexes (^GSPC,^IXIC) continue to break new ground with recent stock rally are doing. Citing one of President Biden’s tweets from earlier this month, Yahoo Finance senior columnist Rick Newman wrote about the relationship between Biden’s economic policies and the recent rise in stock prices, and how the stock market’s strength has improved under the Trump administration. comments on how it compares with the performance seen in
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor’s note: This article was written by luke carberry morgan.
video transcript
– President Biden is looking to cash in on the recent market rally. Now, we’re joined by senior columnist Rick Newman. Rick.
Rick Newman: Hey, guys. Yes, President Biden did something unusual for him recently. He boasted about the stock market in a tweet a few days ago. And you have to wonder, is this what Biden is planning as his re-election campaign heats up here?
His timing is clearly good. I mean, we recently hit new highs in the S&P 500 and the Dow. And if you’re looking at the same Wall Street research notes as I am, you’re starting to see people predicting a Dow of $40,000 when the Dow reaches the $40,000 mark.
As we’ve discussed many times, these round numbers don’t have any special meaning other than to get public attention. So when the Dow was $30,000, there were people wearing hats, wearing celebratory hats, saying Dow 30,000. The fact that this stock market rally is actually happening is noteworthy. And if the Dow reaches 40,000, he would only need to gain about 1.8% more in the Dow to get there.
I think you can hear President Biden bragging about this and trying to take some credit for it. So obviously he’s trying to find any way to get people to forget about inflation, which is the main thing that’s frustrating them, and focus on other things that are going well in the economy. .
So when he said the other day, “Look at what the stock market is doing, it’s a sign of confidence in the U.S. economy,” I think that’s foreshadowing. I think we’ll be hearing a lot more from him as long as this great stock market rally that lasted three or four months remains intact.
– The question, of course, is who will help him? In other words, I’m thinking in my head that it would be better if the stock market continued to rise, contributing to the sentiment of wealthier Americans, right? Some might argue that they are low-income Americans. And perhaps that’s the person he needs to convince.
Rick Newman: Yes, of course. But, you know, I looked at the latest numbers on how many Americans say they own stocks, what percentage of Americans say they own stocks. And it’s currently 61%–61%.
If you think about it, that makes sense since pensions have been missing for a long time. And if you’re lucky enough to have a retirement plan, what most people have as a retirement plan is a 401(k) plan, which means they’re probably investing in stocks. Masu. So this doesn’t just benefit the wealthy.
And people who actually own stocks pretty much know what their investments are doing and that what economists call the wealth effect is real. You feel good when your home increases in value or your investment portfolio increases. And you may want to spend money.
So do people need President Biden to remind them that their investments are on track? I don’t know. There is a clear contrast here with President Trump. When Donald Trump was president, he bragged about when the stock market was going up. According to one study, he boasted about this about once every 35 hours.
I mean, he talked about it constantly. And, of course, it’s trending upwards, he said. It was all thanks to his great policies. At the beginning of the coronavirus pandemic in 2020, stock prices plummeted. After that, President Trump didn’t have much room to stay — when it came to the stock market.
But if stocks continue to trend along their current trend line, and as we all know, reach steady state within a few months, the stock market under Mr. I would say it’s better than before. Same point. And once we get there, I think Biden will definitely do that.
– Let’s take a look. Let’s see if we hear more of these types of tweets and boasts from him in the future. Thank you, Rick. appreciate.
Rick Newman: Get the Dow 40,000 hat.
– Oh, I’m ready.
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