https://www.fool.com/investing/2025/03/30/donald-trump-to-extend-112-year-streak-wall-street/ Republican presidents and recessions have gone hand-in-hand since the 1910s. The Federal Reserve Bank of Atlanta's GDPNow forecast is pointing to the biggest non-COVID-19 contraction for the U.S. economy since the Great Recession. Donald Trump may be staring down dubious history. For the better part of the last two and a half years, the bulls have been running the show on Wall Street. Prior to the latest stock market correction, the iconic Dow Jones Industrial Average (^DJI -1.69%), benchmark S&P 500 (^GSPC -1.97%), and growth-fueled Nasdaq Composite (^IXIC -2.70%) had recently hit fresh, all-time closing highs. Among the many catalysts that have propelled these three stock indexes higher is the November election of Donald Trump to a nonconsecutive second term. During President Trump's first term in the White House, the Dow Jones, S&P 500, and Nasdaq Composite respectively soared by 57%, 70%, and 142%. Investors are hoping another round of corporate income tax cuts, coupled with deregulation, will lead to an encore performance for the stock market. Although the stock market has proven to be a wealth-creating machine for more than a century, an uncanny correlation that's lasted for 112 years suggests Donald Trump may be facing a dubious scenario -- and stocks might pay the price. This correlation is undefeated since 1913 Before diving in, let's state the obvious: The stock market offers no guarantees. If there was a way to know with concrete certainty which direction the Dow, S&P 500, and Nasdaq Composite were headed in the short run, everyone would be taking advantage of this knowledge. With the above being said, 112 years of flawless correlation does tend to offer some validity to the discussion. In 1913, Democrat Woodrow Wilson took office as president. Since Wilson was in the White House, 10 Republicans have followed in his footsteps, of which Donald Trump is the latest (2017 to 2021 and 2025 to present). All 10 of these Republican presidents have overseen an economic recession that began under their watch. In comparison, four of the nine Democrats who've held the presidency over the last 112 years didn't oversee a recession that began during their term. The reason it's worth paying close attention to recessions is because downturns in the U.S. economy are, historically, not great news for corporate earnings. Even though the stock market and economy aren't tethered at the hip, a recession would be expected to eventually weigh on corporate profits and push equities lower. According to an analysis from Bank of America Global Research, approximately two-thirds of the S&P 500's peak-to-trough drawdowns occur during, not prior to, U.S. recessions. Recession signals are mounting for the U.S. economy What makes this 112-year streak so worrisome for Wall Street is the latest forecast from the Federal Reserve Bank of Atlanta's GDPNow model. The Atlanta Fed's model takes into account a number of economic data releases to forecast quarterly gross domestic product (GDP) growth or contraction. While these guesses haven't been spot-on, they've been consistently in the ballpark since the GDPNow model was introduced in October 2011. Roughly two months ago, the Atlanta Fed's GDPNow forecast was calling for 3.9% growth for the first quarter of 2025. As of the March 26 update, the model is now calling for U.S. GDP to contract by 1.8%. Excluding the lockdowns associated with the COVID-19 pandemic, this would represent the largest downturn in U.S. GDP since 2009's Q1 (i.e., during the Great Recession). While there have been a number of concerning economic data points, such as the first notable decline in U.S. M2 money supply since the Great Depression, as well as an all-time high for 60-day auto-loan delinquencies, the stock market's prevailing worry at the moment looks to be uncertainty tied to President Trump's tariffs. The president has repeatedly referred to April 2 as America's "Liberation Day." This is the date when a long list of reciprocal tariffs is slated to go into effect -- albeit, which products will be subjected to these added duties remain fluid. Based on an analysis from Liberty Street Economics, which is comprised of economists who conduct research for the Federal Reserve Bank of New York, companies that were exposed to China-based tariffs during Trump's first term performed notably worse on tariff announcement days than public companies that had no exposure. What's particularly damning is that Liberty Street Economics' data found a correlation between these underperforming stocks on tariff announcement days and future operating weakness. On average, these underperformers saw their profits, employment, sales, and labor productivity fall from 2019 to 2021 (i.e., after the U.S.-China trade war had ended). In other words, all signs are pointing to President Donald Trump extending this dubious 112-year streak and overseeing another recession (Trump oversaw the two-month COVID-19 recession in 2020).
As I said well before he took presidency these next 4 years will not be a repeat of the last time he was president, in fact it's only going to get much worse. Inflation is going to skyrocket Tarriffs will not do anything but create a great recession. Every country he puts tarriffs on is going to retaliate against us as the US will completely fail moving the US economy into the deepest recession it hasn't seen in decades. Add in high Unemployment and a falling gdp. All of this as equities will lose more than a third of their value sending the markets into a long long long term bear market.
Even if you are half right, it hopefully means we won't get boring markets over the next few years. For active traders the more uncertainty, volatility and chaos the better..
I wouldn't doubt if the vix starts averaging a 20+ number for 4 years straight. Volatility is here to stay, complacency is now a thing of the past. Expect markets to trade lower and by end his term the markets will be lower than when he came into office. S&p will break 5000 and eventually 4000 as tarriffs create a worldwide deep recession. Ai hype is done and over, the mag 7 will lose 50% of their value as tech the most loved sector the last decade will become the most hated.... So there will be buying opportunities along the way however all rallies will have to be sold as the new administration will only create a downward spiral for the economy the next 4 years.
The article failed to mention one important fact. Only one Democratic president, Jimmy Carter, ever had a recession.
Well Ctrl + Alt + Down arrow. Flips your screen and chart upside down so you can short but looks more normal. To flip it back to the Democrat normal long trade position when he is gone, press Ctrl + Alt + Up arrow. If memory serves there were some Democrat recessions but you would have to go back to FDR for a significant one. JFK inherited a small one as did Clinton.
Interesting. I had never heard of that. A depression during a recession. But I guess it makes sense. The depression had already started long before FDR took office, but for a couple years FDR made it worse.
The Ghost '37 it was called. 1937 was when the Fed started to raise rates because they thought the Depression was over. They were wrong. WWII was the event that ended the Great Depression. Bernanke did his dissertation on the Depression and that was the reason for his endless ZIRP, QE, Operation Twist, etc. He did not want a recurrence of 1937 collapse. From 3/37 to 3/38 the DJIA dropped 50%.
Bottom line : Tons and tons of trading opportunities for the day traders. So for the next 4 years, make hay while the sun shines. Soon the sun will dim. Sorry investors. But do learn new skills and be the traders.