Thursday, December 30, 2010
The American economy, and the American stock market, tend to do much better when a president's term is nearing an end than they do when the term is beginning. If that pattern continues, the news from both Wall Street and Main Street may get better over the next two years.
For the stock market, the sweet spot is usually the third year of a presidential term, which is 2011 for the Obama administration. The stock market often leads the economy, and that seems to be the case in presidential cycles. The fourth year, on average, has seen the most economic growth.
The pattern is not perfect, of course. The stock market recorded only small gains in 2007, the third year of George W. Bush's second term as president, and there was no economic growth the following year, as a severe recession got under way ...