Continuing a two-month-long trend, U.S. stocks had another good day on Monday. The S&P 500 moved into positive territory for the year, and the Dow Jones industrial average rose 214 points, or 2.6 percent.
Bearing in mind the usual disclaimer that it's hard to ever have much certainty on what factors are responsible for any given day's stock market rise or fall, let's take a closer look at the three news items the financial press is crediting with responsibility for Monday's euphoria: 1) the first rise in construction spending in six months; 2) a greater than expected jump in pending home sales (marking the first back-to-back monthly increase in over a year); and 3) the leaked news that the results of the stress tests will be less horrible than Wall Street feared.
All three of these developments, for good or ill, can be at least partially attributed to White House policy. Private construction spending actually fell in March, but public spending, presumably goosed by the stimulus, rose enough to counteract the drop. The pending home sales figures (which none other than the Big Picture's Barry Ritholtz called a piece of "genuinely good news") were influenced, says National Realtor Association economist Lawrence Yun, by the $8,000 tax credit included in the stimulus bill. Low mortgage interest rates, in part a consequence of the administration's housing plan, doubtless played a role as well.
The stress test news speaks for itself.
All of which raises the question: Where's the love for Obama's stock market juicing prowess? I'm sure we haven't forgotten how the sharp declines of January and February were supposed to be proof that the market was rejecting the Obama presidency. Don't you remember all that noise in late February and early March? Even now, if you go to Google and search for the words "obama," "stock" and "market," seven of the top 10 results date back to two months ago, and blame the president for the stock market's poor performance. There is not a single link to an item in which the president is given any credit for the sustained bull market that started in March.
There's an interesting insight as to how the Web's ecology of information is constructed to be gleaned here. The conservative blogosphere has been desperate for any info-nugget that can be used to critique the Obama presidency. For a brief moment in late February, the stock market seemed to right-wing pundits to be Obama's Achilles' heel. Consequently, they all linked to the same gloating posts and contributed to their high page rank.
But the inverse hasn't happened with respect to the liberal blogosphere and the rising stock market. What could explain this? Are liberals more likely to understand that stock market performance three months into a new president's first term is a lousy proxy with which to measure political success? Or is there so much disunity on the liberal side -- not to mention outright distrust of the investor class -- that no similar meme has a chance of getting the kind of widespread unanimity and multiple links that will enable serious inroads on Google?
The economy isn't fixed, and stock market exuberance about watered-down stress tests seems foolish in the extreme. But perhaps the one thing to be concluded here is that the absence of a clamor from the right blaming Obama for his negative influence on the stock market is the real news. That dog won't hunt, for the moment. Oh, and if Obama really has declared war on Wall Street, someone seems to have forgotten to tell the traders.