Consumers begin their Black Friday specials shopping as Macys opens their doors at 5pm on Thanksgiving Day on November 28, 2019 in New York. (Photo by Bryan R. Smith / AFP) (Photo by BRYAN R. SMITH/AFP via Getty Images)
More Republicans than Democrats feel that record stock market performance has benefited their personal finances © AFP via Getty Images

Nearly two-thirds of Americans say this year’s record-setting Wall Street rally has had little or no impact on their personal finances, calling into question whether one of the strongest bull markets in a decade will boost Donald Trump’s re-election chances.

A poll of likely voters for the Financial Times and the Peter G Peterson Foundation found 61 per cent of Americans said stock market movements had little or no effect on their financial wellbeing. Thirty-nine per cent said stock market performance had a “very strong” or “somewhat strong” impact.

The survey suggested most Americans are not aware of market movements, with just 40 per cent of respondents correctly saying the stock market had increased in value in 2019. Forty-two per cent of likely voters said the market was at “about the same” levels as at the start of the year, while 18 per cent believed it had decreased.

All three big US stock indices — the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite — hit record highs last month. At Wall Street’s close on Wednesday, the S&P 500, regarded as the broadest benchmark of market performance, was up 24.2 per cent since the start of the year, putting the index on track for its best annual showing since 2013.

President Trump has staked his re-election bid on a strong US economy, and frequently touts stock market performance as evidence of his economic leadership. Last Friday, he wrote on Twitter: “New Stock Market Record today, AGAIN. Congratulations USA!” Earlier in the week, he tweeted: “Another new Stock Market Record. Enjoy!”

At a campaign rally in New Hampshire this summer, Mr Trump said Americans would have “no choice” but to vote for him in 2020, because if he lost “your 401(k)s [will go] down the tubes, everything’s going to be down the tubes . . . so whether you love me or hate me, you got to vote for me”.

Bar chart of the effects of stock market performance on personal finances that shows 6/10 people say the impact is low

The survey findings are part of the monthly FT-Peterson US Economic Monitor, which tracks voter sentiment towards the US economy in the run-up to next year’s presidential election. It seeks to follow whether likely voters feel better or worse off since Mr Trump became president. Ronald Reagan defeated Jimmy Carter in 1980 by asking voters: “Are you better off than you were four years ago?”

The most recent poll, conducted just before the Thanksgiving holiday, found that two-thirds of Americans do not believe their personal finances have improved since Mr Trump’s election, largely unchanged from last month’s FT-Peterson poll.

The most recent survey asked new questions about public perceptions of Wall Street performance. In addition to seeking credit for the stock market rally, Mr Trump has frequently caused volatility in equities. On Tuesday, the S&P 500 fell as much as 1.4 per cent after the US president said he was prepared to wait until after next year’s election to reach a trade deal with China.

In addition to retail investors, many Americans are exposed to the stock market through their pension plans, 401(k)s — a kind of defined-contribution pension — individual retirement accounts, mutual funds and other savings vehicles. According to the Federal Reserve’s latest survey of consumer finances, about half of US households owned stocks directly or indirectly, but just 14 per cent of US families hold stocks outright.

The FT-Peterson poll showed party affiliation was a key driver behind voter views of the markets. Fifty-eight per cent of Republicans polled knew equities had increased in value this year, compared with 25 per cent of Democrats. Forty-five per cent of Republicans said the stock market had a “very strong” or “somewhat strong” effect on their personal finances, compared with 35 per cent of Democrats.

Line chart of how supporters of different US parties say the stock market has performed, that shows Republicans are more likely to say the market is worth more than at the beginning of the year

The poll also indicated that Americans’ views on the stock market were linked to their incomes. Sixty per cent of respondents earning more than $100,000 per year correctly identified that the stock market had increased in value this year, compared with just 29 per cent of voters earning less than $50,000 per year.

People earning more than $100,000 a year were also significantly more likely to say that the stock market had a “very strong” or “somewhat strong” impact on their personal finances.

Line chart of how people in different income brackets say they are affected by the stock market's performance, that shows those with higher incomes report a greater impact

The latest poll found 31 per cent of Americans believe they are now worse off financially than they were at the start of Mr Trump’s presidency. Another 37 per cent said there had been no change in their financial position since Mr Trump’s inauguration in January 2017, while 32 per cent said they were better off.

The results were virtually unchanged from the previous month, when slightly more people — 35 per cent — said they were better off, and the same share said they were worse off.

The most recent FT-Peterson Poll was conducted online by Global Strategy Group, a Democratic polling group, and North Star Opinion Research, a Republican group, between November 19 and November 24. It reflects the opinions of 1,010 likely voters nationwide, and has a margin of error of plus or minus 3 percentage points. 

The Peterson Foundation is a non-partisan, non-profit organisation focused on America’s fiscal challenges.

Additional reporting by Jennifer Ablan and Peter Wells in New York and Brendan Greeley in Washington

Copyright The Financial Times Limited 2023. All rights reserved.
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