Wall Street abounds with ‘Obamanomics’ critics, and Main Street made clear its discontent with the president’s policies in the results of the midterm elections last November.
But detractors of President Obama should remember one thing – Wall Street has been booming under this president. Since Obama took office on Jan. 20, 2009, the Dow is up about 48%, the S&P 500 is up 60% and the tech-focused Nasdaq is up 90%.
Of course, there was plenty of room for improvement after the market meltdown before Obama took office. The broader stock market is only now struggling back to levels seen in the summer of 2008.
Is it just a trick of timing, with America buying into Barack Obama at the bottom? Or has the president actually helped investors and the economy without getting enough credit?
Let’s take a look at the numbers across five crucial sectors touched by the president’s policies and see for ourselves:
Obama: Good for Financials
Some folks may not remember the Troubled Asset Relief Program was actually signed into law a month before Election Day in 2008. Obama and his economic team have held watch over the financial sector and TARP over the past two years, but in many respects were playing with a hand they were dealt by the previous administration.
So how has the group done? From a shareholder perspective, they have done well by the financial sector. Bank of America’s (NYSE: BAC) stock has doubled since 1/20/09, as has Goldman Sachs (NYSE: GS). Wells Fargo (NYSE: WFC) is up even more, 138%, and JPMorgan Chase (NYSE: JPM) is up 150%. Citigroup lags these names, but its 83% gains almost double the returns for the Dow Jones – an index it was removed from amid the financial crisis.
It’s worth noting, however, that some attribute recent strength in the sector to the blunting of the president’s power, as Republicans have taken control of the House. But regardless of intentions or politics, the fact is that bank stocks have had a market-beating run for the last two years – and after a rally in the sector to close 2010, it appears financials are looking to build on that momentum in 2011.
Obama: Mixed on Health Care
Health care is perhaps the only industry that “missed” the Great Recession. Though economic troubles in 2008 and 2009 slowed growth in healthcare spending, the industry did continue to grow overall and become an even larger part of the American economic engine.
But as Obama pushed through his landmark health care reform bill, many fretted the move would monkey with a free-market health care system that has seen big growth lately. That, and add crippling debt to an already fragile U.S. balance sheet.
What’s the score with healthcare? Big pharma has really been hurting – but that’s more the fault of expiring patents and generic competition than President Obama. Pfizer (NYSE: PFE), Merck (NYSE: MRK) and other large-cap drug companies finished 2010 worse than they started and showed anemic growth in 2009. On the other side of the coin, the boom of some small-cap biotechs like Alexion (NASDAQ: ALXN) is driven by innovative treatments or FDA approvals rather than the guiding hand of the administration.
As for insurers UnitedHealth (NYSE: UNH) and WellPoint (NYSE: WLP), both have seen market-beating returns north of 71% since Obama took office and were on the front lines of his landmark health care reform. Still it’s not a clear stamp of approval, since other major insurers Aetna (NYSE: AET) and Aflac (NYSE: AFL) have both underperformed the market slightly since 2009.
The takeway? Just like Obama’s health care policies overall, we’ll need some more time to figure things out. It’s a mixed bag right now for health care stocks, and success or failure seems to depend more on the company itself than politics. But at the very least, it appears Obama’s health reforms took the Hippocratic Oath to heart by first doing no harm to the state of healthcare stocks.