The US stock market has seen better returns in Joe Biden's first 100 days than under any president in the past 75 years

• The S&P 500 posted better returns in Biden's first 100 days than under any president since World War II.
• JPMorgan analysts said the rise was due to record fiscal and monetary stimulus.
• The analysts said they thought tax increases wouldn't hurt market returns as much as anticipated.

The US stock market has seen better returns in Joe Biden's first 100 days as president than it has under any other president in the past 75 years, according to data from JPMorgan.

In a note to clients on Friday, JPMorgan analysts led by John Normand reviewed the Biden administration's performance since Inauguration Day and discussed how tax policies and spending programs could move markets in the coming months.

The analysts said record fiscal stimulus had pushed equity returns to all-time highs in Biden's first 100 days.

"Not bad for someone Trump labeled as Sleepy Joe during the campaign," the analysts wrote.

S&P 500 returns since Biden was elected are nearly 25%, compared with returns of just below 15% from former President Donald Trump's election to the 100-day mark after his inauguration.

Data from JPMorgan indicated that Democratic presidents' average S&P 500 return was more than double the average return of Republican presidents since the end of World War II.

The previous high-water mark for 100-day success was President John F. Kennedy, who oversaw equity returns of more than 20% in his first 100 days in office.

JPMorgan said that while Biden's policies since his inauguration had benefited the market, proposed policies were "no longer so unambiguously positive."

Biden is said to be planning to nearly double the capital gains tax rate to as high as 43.4% for wealthy Americans.

The JPMorgan team said tax hikes on corporations and individuals to fund infrastructure and social spending, coupled with a tightening regulatory environment, could be a drag on equities in 2021.

That said, the team added that it didn't think tax increases would drive a big dip in earnings.

"The view since the 2020 campaign has been that a higher corporate rate would lower S&P 500 EPS by several dollars," the analysts wrote. "But within a surging earnings growth environment driven by greater fiscal outlays and vaccine-driven reopening, our US Equity Strategists have refreshed and expanded that original analysis this week, with no change to the year-end S&P target of 4400."

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Increases in the capital gains tax rate in 1986 (to 28% from 20%) and 2013 (to 25% from 15%) motivated modest (about 5%) intramonth drawdowns in equities before new codes came into effect, JPMorgan said.

But JPMorgan analysts said that it's a small sample size and that the 1986 Tax Reform Act included lower corporate and individual rates.

Overall, the analysts said they expected Biden's tax policies to drive a continued rotation into value stocks and away from big tech and growth names, instead of a market downturn.

JPMorgan's view is backed up by UBS Global Wealth Management, which told clients in a note last week that it had found "no correlation between capital gains tax rates and equity market valuations."