Bears trump bulls on inauguration day

January 20, 2009

People around the world watched Barack Obama’s inauguration on Tuesday with anticipation and hope, but  the stock market took a bleaker view, with the major U.S. indices down more than four percent, the biggest-ever inauguration day stock market decline.

The stock market has historically fallen during inaugurations. The chart below, with an average 0.55 percent decline, shows the Dow’s performance during planned inaugurations days since 1897; it does not include unplanned inaugurations after a president’s death. Republican inaugurations are in red, Democrats in blue.

Do you have an explanation for the market’s behavior? Leave your answer in the comments section.

6 comments

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Bad government, bad monetary policies and war. That’s a start.

Posted by jason | Report as abusive

trying to jumpstart the economy with billions of dollars is not going to work, its like jumpstarting a dead battery, its going to shake and rattle but its not going to start.

Posted by jim | Report as abusive

funny as hell the USA is toast due to 52% of the voters.

Posted by obama-idiot | Report as abusive

So how exactly do you start an economy Jim – you seem to know that “throwing” money at it won’t work – well what will?

Investors as a whole are fickle; I would not worry too much as long as you are invested in solid companies and are young enough; I personally am having a hay-day. At 23, I have time on my side and I know that companies I am snatching up at bargain prices such as GE will recover over time.

Posted by Sebastian | Report as abusive

Could it be that people are stupid myopic herd beasts? This isn’t likely to improve any time soon and it could get a heck of a lot worse before it improves. Is the market disappointed he survived the inauguration? Were they expecting Obama’s top-10 hot stock tips? Maybe he was supposed to say this is all just a bad dream and we should get back in bed and go to sleep. Pray for Obama because as of tomorrow, the party is definitely over.

Posted by DP | Report as abusive

I have an article on my blog about this very subject. I believe the problem is the banking sector. It has gone beyond bad sentiment regarding banking stocks. It is a global lack of confidence in the banking industry in general. Unstable banks equals unstable markets. The bears move in on that. Stop by and read the rest of the article.