Many predict a stock market crash in 2024. According to the former president Donald Trump, the crisis can be avoided on one condition: his re-election. It’s just one joke pre-election?
In intricate political games and the race for the White House Trump’s prophecy it is intertwined with the conflicting signals of the economy.
In a recent interview, Trump expressed his concern over a a potential stock market crash in the next 12 monthssuggesting that the situation could worsen if he does not win the presidential election.
The situation is really so dramatic and comparable to that Herbert Hoover inherited in 1929? There is a real risk of a neck like that The Great Depression?
Trump’s statement does not bode well. However, it is essential to analyze macroeconomic contexts and data.
Trump’s prophecy and the shadow of the Great Depression
Trump’s words sparked a heated debate economic stability, evoking the spirit of Herbert Hoover, the president who saw the 1929 stock market crash that triggered the Great Depression. Trump admitted that the current economic situation is fragile and his failure in the election could lead to an imminent collapse. This scenario, underlined by his own words, could only be avoided by his victory and leadership.
Is the stock market heading for a collapse? Trump vs. Biden
“When there is a collapse, I hope it happens in the next 12 months because I don’t want to be Herbert HooverTrump said. This reminder of the past highlights the fear of an era of economic suffering similar to the Great Depression. Although the historical view of Hoover is controversial, some historians reevaluate his actions during the 9/29 crisis. agreement only from 39%.
Immigration management, broken promises and a lack of decisiveness in key situations such as the Gaza crisis have fueled criticism and disappointment with the current administration. Unable to resolve the deep divisions plaguing America, Biden is facing growing frustration. The hypothesis of his withdrawal from the presidential race in 2024 is becoming more and more real, with the need for new figures capable of uniting a fractured nation. The Stock marketalready affected by political uncertainty, reflects this tumultuous climate.
S&P 500 performance under Biden and Trump, the differences
Let’s compare nowstock market performance under the presidency of Joe Biden and under President Donald Trump. After an exceptional year 2023 forthe S&P 500 index (+24.23%), the balance seems to point to a Biden victory. However, this is not the case.
S&P 500 during a presidential term
Source Axios YahooFinance
Both leaders faced different economic challenges.
After Biden’s 2020 victoryS&P 500 experienced a significant increase 37.4% in his first year period, marking the best annual return since Harry Truman’s presidency in 1945. However, the index suffered a 19% drop in 2022, its worst annual decline since 2008.
Biden’s presidency was characterized by economic complexity, with challenges related to post-pandemic recovery and high inflation. Investors suffered a stock market slump in 2022, fueling discontent over the Biden administration’s economic management.
If you had invested $1,000 in the S&P 500 at the start of Biden’s term, your investment would be worth $1,237.32 today, an increase of 23.7%. However, during four years of Trump’s presidencyThe S&P 500 posted average annual gains 14.5%exceeding the average annual return below Bidencertified on11.9%.
While Biden boasts higher prices and record highs, Trump’s total returns have surpassed Biden’s. With elections in 2024 on the horizon, economic and market performance will remain at the center of debate.
The stock market: what happens when Biden or Trump wins
The stock market could react differently depending on whether Biden or Trump wins four scenarios possible.
In the case of one Biden’s victory with both houses in control, markets may initially suffer as tax increases and environmental policies may affect P/E American companies.
On the other hand, one Trump’s victory could ensure stability aa stimulate the markets through its control over the Fed.
as for stock sectorsA Biden victory could benefit the renewables and utilities sector, while a Trump victory could be positive for conventional oil stocks. For commodities, Biden’s anti-shale policies could benefit oil priceswhile the election may have affected the exchange rate euro-dollar andgold.
in geopolitical termsA Trump victory could lead to policy America first, while Biden could strengthen global ties. In negotiations with China, the two candidates are trying to confront each other over the intellectual property of a technology that represents a potential source of volatility in markets.
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