How Long Post-Election Rallies Last After Inauguration Day — in One S&P Chart

By Victor Reklaitis, MarketWatch

Stocks could slump as President-elect Trump becomes President Trump. That’s starting to sound like practically the consensus view.

The Trump rally could fizzle as the new commander-in-chief faces the “hard task of actually governing,” as one strategist put it.

Stocks tend to strengthen in the two weeks after Inauguration Day, but one-month returns are typically negative, LPL Financial points out. LPL looked back as far as former President Eisenhower’s first oath of office in 1953.

The chart below from DoubleLine Capital tells a similar story. It illustrates the average post-election advance when a party reclaims the White House, going back to Ike’s time.

DoubleLine CEO Jeff Gundlach shared the chart during a Dec. 13 webcast, and it served as a chart of the day for MarketWatch’s Need to Know column. Gundlach has been sounding bearish on stocks, giving warnings this month and last month.

To be sure, with many pundits warning about an end to the Trump rally as his Jan. 20 inauguration nears, some contrarians have suggested near-term weakness won’t actually materialize.

Courtesy of MarketWatch