Market Update – November 9, 2016
As everyone obviously now knows, Donald Trump will be sworn in as the 45th President of the United States in a couple months.
His victory was certainly considered a surprise given the read from the pollsters and real-money-betting sites which favored Hillary Clinton when the polls closed – some had even suggested a likelihood of a Clinton victory @ greater than 80%.1
Overnight the US Stock market reacted very negatively to this outcome – with futures on the Dow Jones Industrial Average trading more than 800 points lower at 1am CT when Trump’s victory was secured.
International markets also traded markedly lower on fears of US isolationism, policy ambiguity and general transitional fears.
Today’s trading day has, to this point, turned out otherwise. At the midway point of the trading day, the Dow is higher by over 150 points and the European markets have closed higher.2
Bond markets are trading lower – rates are moving higher – with the 10-year bond offering a 1.98% yield3.
It is too early to draw meaningful conclusions from today’s price action as it resembles that of the prior 2 trading days which were attributed to the increasing prospects of Hillary Clinton’s success. (Alternate drivers for the same outcome is an atypical alignment in investing).
It is also premature to determine the enduring economic influences of a Trump presidency vs. that of Clinton presidency.
But it is not too early to anticipate some ongoing and potentially elevated spates of volatility in stock, bond, currency and commodity markets.
Many industry sectors will vie for attention as the front-running of policy decisions takes place. Particularly, the healthcare, infrastructure and defense subsectors will be under the market’s microscope.
Much of what we’d expect to see in the next several weeks will be emotionally and not economically predicated. Differentiating opportunity from noise will heighten in importance as there is sure to be plenty of both.
Navigating an investment portfolio thru the implementation of a new administration and its policy priorities demands a fair and appropriate time horizon & a balanced approach to risk management.
We’ll keep in close touch as we digest the impact of the elections (including Congressional contests) and their prospective impact on our client accounts.
Important Disclosures:
The views expressed herein are those of Douglas Ciocca on November 9, 2016 and are subject to change at any time based on market or other conditions, as are statements of financial market trends, which are based on current market conditions. This information is provided as a service to clients and friends of Kavar Capital Partners, LLC solely for their own use and information. The information provided is for general informational purposes only and should not be considered an individualized recommendation of any particular security, strategy or investment product, and should not be construed as, investment, legal or tax advice. Past performance does not ensure future results. Kavar Capital Partners, LLC makes no warranties with regard to the information or results obtained by its use and disclaims any liability arising out of your use of, or reliance on, the information. The information is subject to change and, although based on information that Kavar Capital Partners, LLC considers reliable, it is not guaranteed as to accuracy or completeness. This information may become outdated and we are not obligated to update any information or opinions contained herein. Articles may not necessarily reflect the investment position or the strategies of our firm.