Why does the Stock Market improve when Democrats are in control of the government? Why does the Stock Market decline when Republicans are in control of the government?
This is my opinion based on the Axioms of Economics.
When Republicans are in control money tends to be concentrated into the hands of fewer and fewer individuals. This slows money velocity (movement of money through the hands of the citizens.) This gives people the sense of less money in circulation. With a slower money velocity (money circulating slower) the Stock Market declines.
When Democrats are in control money tends to be less concentrated in the hands of a few individuals. There is more money in circulation for the general population. This increases money velocity (money circulating faster) the stock market improves.
The demand for commodities, trades, goods and services is directly related to the money velocity in a society. With increased money velocity, sales of commodities, trades, goods and services increase. The stock market does better. This results in increased prosperity for the greatest number of people.
With decreased money velocity, sales of commodities, trades, goods and services decrease. The stock market declines. This results in recessions.