Chart of the Day - Wednesday, August 24th, 2022

Today’s Chart of the Day comes from Ned Davis Research, via Willie Delwiche. The big headline today was Biden's plan to forgive a portion of student debt. It's controversial, but it's important to note that it's happening right where you'd expect it to within the presidential cycle. The blue line shows the Dow throughout the 4-year presidential election cycle. The orange line shows the Real Money & Fiscal Policy Index, which we'll call liquidity. This chart shows that liquidity and stocks go hand in hand throughout the Presidential cycle. As you can see, the best years for stocks tend to come in the 3rd & 4th years of a president's term. As an election approaches, the sitting president tends to do everything in their power to stimulate the economy, which in turn tends to boost stock prices. Did Joe just answer the market's call for more liquidity?