1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Lovisa Alvin
Lovisa Alvin
Articles (30) 

The Market’s Performance After the Election of Donald Trump

Markets have reacted unexpectedly; what can you expect in the coming weeks?

November 25, 2016

During the leadup to the presidential election, most analysts and talking heads were confident that a Donald Trump win would send the markets into chaos and turmoil. It was believed that the markets would react similarly to how markets responded to Britain's Brexit vote last summer.

However, this wasn’t the case. Although the market futures did fall dramatically while the votes were being counted, they immediately shot back up and have remained near record highs ever since. The markets have done the complete opposite of what was expected. The major indexes have set new records, and they could even climb higher.

Surprisingly, this has not been confined to the U.S. either. Even Asia markets have managed to extend their gains. On Tuesday, the Dow ended the day above 19,000. This marks the first time the market has ever achieved this feat. While there is some good news, there is always bad news lurking around the corner as well. The biggest volatility factor at this point will be oil. Oil may prove to be the pin that sends the market crashing back down, once it is removed. Nonetheless, it will all come down to OPEC's decision.

According to eliNext and other top advisers, it is believed that OPEC will put a restriction on oil output and this could very well send the price of oil back up over the $50 mark. Nonetheless, it is clearly obvious that a Trump administration will be outstanding for American companies as long as the president-elect does what he says. First and foremost, the government is expected to cut taxes and increase infrastructure spending. Both will benefit companies big and small. And of course, Trump has repeatedly noted that he intends to decrease the number of regulations on companies.

These moves will help companies thrive while potentially allowing them to bring jobs back to the U.S. Since Trump's election, the Dow Jones index has climbed as much as 1,000 points and many believe it will soar even higher. With Christmas right around the corner, the old infamous Santa Claus rally could help to put the Dow right over the 20,000 mark. Only time will tell if that happens before the end of the year. However, it will happen sooner or later.

Wall Street insiders are still working diligently to figure out the new administration and how it will play into the banking industry. Rusty Cloutier, who operates a small bank in Lafayette, Louisiana, told The New York Times that he always felt Trump would be good for the small bank. Cloutier, president of MidSouth Bank, also went on to say that Trump might offer some regulatory relief by pulling priorities away from the wealthy interests of big cities and back to blue-collar, rural communities.

While things will ultimately change during a Trump administration, it is widely believed that the change will be good for the market and companies in the U.S. With decreased regulations and taxes, companies will be able to flourish, and their stocks will continue to climb higher.

Start a free seven-day trial of Premium Membership to GuruFocus.


Rating: 2.0/5 (1 vote)

Voters:

Comments

Please leave your comment:


More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by Lovisa Alvin


User Generated Screeners


keepcoolPEPV0.3-1AvgTrV100000GrossMarg
HOLKLSUCut the Mustard Chemicals Meta
oskouiJap - PioEY
oskouiCanada - PioEY
OGCAMGUpdated Bad Current Ratio 2017
sbeccuegf10YR 10% BOOK
sbeccuegfBANKS 10 ROE
stewloewySL-Default Template
rmaluskiOE + Div Growth Hold List
pbarker4638 Profitable Quarters
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK