Barack Obama not only made history becoming the first black President of the United States Tuesday, but he was also inhospitably greeted by the biggest January Inauguration Day stock selloff ever.
At the closing bell, the Dow Jones Industrial Average was down over four percent, with the S&P 500 and NASDAQ indices plummeting more than five percent.
As the Wall Street Journal's MarketBeat blog reported, this makes today's performance the worst since Inauguration Day was moved to January:
Since the date of the inaugural was moved up to January 20 for the swearing-in of Franklin Delano Roosevelt for his second term in 1937, the date (or nearest trading day) of the swearing-in has been lackluster. The best day was Jan. 21, 1985, the day after the swearing-in of Ronald Reagan for a second term, when the Dow rose 2.77%.
Otherwise, out of the last 10 January inaugural days following the end of the previous full presidential term, just two have ended with the Dow higher (1985 and 1997), and the rest lower, with the worst day being the -2.09% selloff endured on the day Mr. Reagan was sworn in for his first term. Other inaugural days have been poor as well — Gerald Ford’s swearing-in on August 9, 1974 saw the Dow fall nearly 1%, and the DJIA lost 2.89% on Nov. 22, 1963, when Lyndon B. Johnson replaced the assassinated John F. Kennedy.
To be fair, Inauguration Days are typically bad ones for stocks. CNBC has been telling viewers all day that the market drops 72 percent of the time when a president is being sworn in.
Maybe more important, stocks normally do very poorly the first year of a new president's first term. There are a number of logical explanations for this including the overall uncertainty of what a new administration will bring and just how their new policies will impact the economy.
However, it has to be distressing for the new President and his team to see stocks plummet more than on the day JFK was assassinated. And, they can't be pleased by how the selloff accelerated after Obama finished his Inaugural address:
CNBC's Steve Leesman commented that Wall Street must have been disappointed when Obama didn't walk on water after his speech.
Unfortunately, this wasn't the first bad day for stocks this month as CNBC.com reported last Thursday:
The Dow and S&P 500 are having their worst open to a New Year ever.
- The Dow is down 6.6% YTD. The Dow has only been down more than 6% through the 14th of January only once before, in 1978 when it was down 6.38%.
- The S&P 500 is down 6.7% YTD. The previous record through Jan 14 was a drop of 5.7% set in 1982
- The NASDAQ is down 5.5% YTD, its second worst open to a new year. It was down 6.6% for the same period in 2008.
With today's selloff, this is becoming the worst January stock performance to ever usher in a new President.
Makes one wonder whether the giddy Obama-loving media will address any of this on television tonight and in the papers tomorrow, or will they refuse to allow anything to dampen the celebration.