Now that President Barack Obama and his new administration are at the milestone 100-day mark, it’s also time to tally up the administration’s impact on exchange traded funds (ETFs).
After 100 days of new leadership, it’s time to evaluate the new administration’s progress. In regard to the economy, the banking crisis and the ways Obama will change the financial industry and its relation with real estate will fall under the microscope, NPR reports. NPR also has a timeline of key events so far in the new administration.
On Wall Street, investors were still unsure and mostly unfazed by a new presidency, remarks Jeff Cox for CNBC.
Obama has spent much of his time in office so far trying to right the financial system while boosting consumer confidence, health care, technology and taking some steps to ease the housing crisis. Is it working? There are some signs that the clouds appear to be lifting, but we’re not out of the woods yet.
However, some of the best-performing funds over the last three months are some of the sectors that Obama’s administration has been working to fix, directly or indirectly:
- iShares Dow Jones U.S. Broker-Dealers (IAI): up 28.5% year-to-date
- Broadband HOLDRs (BDH): up 26.7% for the last three months
- SPDR S&P Retail (XRT): up 30.4% for the last three months
While we’re seeing the clouds lift in some areas, there is much room for improvement in many others, including:
- iShares Cohen & Steers Realty Majors (ICF): down 5% in the last three months
- Utilities Select Sector SPDR (XLU): down 13.3% in the last three months
The masses are divided over the administration. They are giving Obama good personal approval ratings but express doubts over policies. The public is almost evenly divided over Obama’s economic reforms, but investors are warming up to the administration’s plans on helping the banking sector and its public-private toxic debt plan.
Obama got dealt a lousy hand. He took office during a recession, a banking crisis, a stock market collapse and rising unemployment. He also had to focus his resources on the root of the problem, the banks. The markets seem to be reacting well to the fact that there now appears to be a more defined plan.
We may have to go back to the well a few times more, but many on Wall Street feel that we may finally be on the road to a recovery.
Next up for Obama will be focusing on jobs – it’s hard to create them and think about them when you’re dealing with a banking crisis. Obama will also have to focus on stemming the tide of foreclosures and personal bankruptcies, as well.
For full disclosure, some of Tom Lydon’s clients own shares of XRT.
Max Chen contributed to this article.