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Jeff Reeves
Jan. 20, 2011, 12:01 a.m. EST
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First Take "º
China's worst-kept secret
By Jeff Reeves
ROCKVILLE, Md. (MarketWatch) "” Wall Street abounds with "Obamanomics" critics, and Main Street made clear its discontent with the president's policies in the midterm elections last November.
But detractors of President Barack Obama should remember one thing "” Wall Street has been booming under this president. Since Obama took office on Jan. 20, 2009, the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 11,825, -12.64, -0.11%) is up about 48%, the S&P 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,282, -13.10, -1.01%) is up 60% and the tech-focused Nasdaq Composite Index /quotes/comstock/10y!i:comp (COMP 2,725, -40.49, -1.46%) is up 90%.
Of course, it's worth noting that 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.
Reuters U.S. President Barack Obama speaks next to Chinese President Hu Jintao.
So is it just a trick of timing, with America buying into Obama at the bottom? Or has he actually helped investors and the economy in ways he doesn't get credit for? Let's take a look at the numbers across five crucial sectors touched by the president's policies and see for ourselves.
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.
Global View columnist Bret Stephens and Mary Kissel of the editorial board on Hu Jintao's visit to the U.S.
So how has the group done? Well, from a shareholder perspective, they have done well by the financial sector. Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 14.37, -0.63, -4.20%) stock has doubled since Jan. 20, 2009, as has Goldman Sachs Group Inc. /quotes/comstock/13*!gs/quotes/nls/gs (GS 166.49, -8.19, -4.69%) . Wells Fargo & Co. /quotes/comstock/13*!wfc/quotes/nls/wfc (WFC 31.81, -0.68, -2.09%) is up even more, 138%, and J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 43.71, -1.04, -2.32%) is up 150%. Citigroup lags these, 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 that some attribute recent strength in the sector to the blunting of the president's power, however, 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.
Health care is perhaps the only industry that "missed" the Great Recession. Though economic troubles in 2008 and 2009 slowed growth in health-care 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.
So what's the score with health care? Well big pharma has really been hurting "” but that's more the fault of expiring patents and generic competition than anything the president has done. Pfizer Inc. /quotes/comstock/13*!pfe/quotes/nls/pfe (PFE 18.32, -0.06, -0.33%) , Merck & Co. /quotes/comstock/13*!mrk/quotes/nls/mrk (MRK 33.91, +0.04, +0.12%) and other drug majors 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 Pharmaceuticals Inc. /quotes/comstock/15*!alxn/quotes/nls/alxn (ALXN 84.68, -1.69, -1.96%) is driven by innovative treatments or Food and Drug Administration approvals rather than the guiding hand of the administration.
But as for insurers UnitedHealth Group /quotes/comstock/13*!unh/quotes/nls/unh (UNH 40.56, -0.32, -0.78%) and WellPoint Inc. /quotes/comstock/13*!wlp/quotes/nls/wlp (WLP 62.06, -0.91, -1.45%) , both have seen market-beating returns north of 71% since Obama took office and were on the front lines of Obama's landmark health-care reform. Still it's not a clear stamp of approval, since other major insurers Aetna Inc. /quotes/comstock/13*!aet/quotes/nls/aet (AET 33.19, -0.97, -2.84%) and Aflac Inc. /quotes/comstock/13*!afl/quotes/nls/afl (AFL 56.81, -0.13, -0.23%) have both underperformed the market slightly since 2009.
The takeaway? 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 health-care stocks.
Beijing needs to keep a tighter lid on its economic data as it seeks to build confidence in the numbers, writes Michael Kitchen.
10:24 p.m. Jan. 19, 2011
"Low-budget carrier easyJet's shares tumble 10% on economic outlook, fuel prices http://on.mktw.net/fBK7Mr" 3:46 a.m. EST, Jan. 20, 2011 from MarketWatch
"Shanghai stocks tumble 2.9% after economic data suggest more tightening possible http://on.mktw.net/h8RU2A" 2:10 a.m. EST, Jan. 20, 2011 from MarketWatch
"China's economy grows 10.3% in 2010, above 10.2% forecast; Dec. consumer inflation +4.6% http://on.mktw.net/fZOe6Y" 9:06 p.m. EST, Jan. 19, 2011 from MarketWatch
"Coming up: China releases GDP, inflation data at 9 p.m. Eastern / 6 p.m. Pacific http://on.mktw.net/fNruKi" 8:10 p.m. EST, Jan. 19, 2011 from MarketWatch
"Japanese stocks fall at open, following U.S. losses; Nikkei Average down 0.6% http://on.mktw.net/i1QiM2" 7:04 p.m. EST, Jan. 19, 2011 from MarketWatch
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