2025 tracking like typical first year of the U.S. presidential cycle, plus 🧁 weekend sprinkles 🧁
The Sandbox Daily (5.2.2025)
Welcome, Sandbox friends.
Today’s Daily discusses:
first year of the U.S. presidential election cycle
🧁 weekend sprinkles 🧁
Let’s dig in.
Blake
Markets in review
EQUITIES: Russell 2000 +2.27% | Nasdaq 100 +1.60% | S&P 500 +1.47% | Dow +1.39%
FIXED INCOME: Barclays Agg Bond -0.49% | High Yield +0.31% | 2yr UST 3.824% | 10yr UST 4.308%
COMMODITIES: Brent Crude -0.85% to $61.60/barrel. Gold +0.62% to $3,241.6/oz.
BITCOIN: +0.18% to $97,016
US DOLLAR INDEX: -0.23% to 100.013
CBOE TOTAL PUT/CALL RATIO: 0.83
VIX: -7.80% to 22.68
Quote of the day
“If I had asked the public what they wanted, they would have said a faster horse.”
- Henry Ford
First year of the U.S. presidential election cycle
Historically, the first year of a U.S. presidential cycle tends to undergo sideways, range-bound consolidation before lifting higher throughout the remainder of the year.
2025 seems to be following the historical pattern in spades.
Strong post-election gains followed by Liberation Day tariff turbulence.
After washouts across breadth, momentum, and sentiment, the technical setup for a back half recovery looks promising – especially after multiple signals are firing bullish promise.
The chart below highlights the average progression for several major indices during the first year of the presidential progression.
Historically, during the first year of a presidential cycle, annual returns have averaged +6.6% for the S&P 500 index with average intra-year drawdowns of -16.3%. See the table below.
The 2025 peak-to-trough drawdown reached -19%, or about the long-term average.
With the index approaching breakeven for the year after a monster snapback rally in April, it’s quite doable to gain another 6-7% in the back half of 2025 to reach its own historical average for presidential cycles.
After a challenging 100 days, the good news for investors is forward returns historically have been quite compelling following the corrective phase during year one of the presidential cycle.
After the lows were in place, the index posted average gains of +12.8% and +12.6% over the following 6-months and 12-months.
Sources: Piper Sandler, Bloomberg
🧁 Weekend sprinkles 🧁
Here are the ideas, sights, and sounds that caught my attention this week – perfect for quiet time over the weekend.
Blogs
Sparkline Capital – Investing Amid Trade Wars (Kai Wu)
The Big Picture – Why Macro Forecasting is So Hard Impossible (Barry Ritholtz)
Carson Group – The Labor Market Hasn’t Cracked, but That Means Higher Rates for Longer (Sonu Varghese)
The Washington Post – Beware, Consumers, Tariffs Are Already Damaging the Supply Chain (Jim Geraghty)
OptimistiCallie – Where Art Thou, Jay Powell ?!? (Callie Cox)
The Atlantic – Something Alarming is Happening to the Job Market (Derek Thompson)
Podcasts
The Ezra Klein Show – Is the Sun Setting on America’s Financial Empire with Kenneth Rogoff (YouTube, Spotify, Apple Podcasts)
Bloomberg Odd Lots – Anna Wong: Empty Shelves Are Coming Soon (YouTube, Spotify, Apple Podcasts)
Movies/TV Shows
Untold: Johnny Football (Netflix, IMDB, YouTube)
Music
Matt & Kim – Forever (Spotify, Apple Music, YouTube)
Books
Sahil Bloom – The 5 Types of Wealth: A Transformative Guide to Design Your Dream Life (Amazon)
That’s all for today.
Blake
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Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.
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