The Daily Difference: Post-Presidential Election Update
2016 Post-Presidential Election Update
Yesterday, “The Donald” trumped Secretary Clinton and earned the nomination to become the 45th president of the U.S. Most people (irrespective of political affiliation) are relieved to have the election in the rear view mirror, and the markets seem to agree. Below is a brief update on how financial markets have reacted over the past 12 hours or so, along with some color on what might be driving the moves and what we can expect to see as we move forward.
Though a lot of uncertainty remains, we are seeing some initial moves that are intriguing. For example, we saw strong moves in healthcare and biotech related names. This is likely a reaction to an anticipated lack of policy response by a Trump administration towards drug companies for rising drug costs. We also saw particularly strong performance amongst financial stocks and big banks, which may reflect optimism that we’ll see less regulation. Finally, as mentioned above, there was a significant move higher in interest rates. Our investment committee has been discussing this today and while there is not a concrete explanation for the move higher in interest rates, possible explanations could include large traders and investors unwinding positions, foreign governments selling U.S. Treasuries, or renewed growth and inflation expectations, just to name a few. It will be interesting to watch interest rates over the coming days and weeks to see if they hold at these levels.
We expect continued volatility in global financial markets. As always, we are focused on building well diversified, thoughtful portfolios through long term planning, not trading headlines. We will continue to update you as more information becomes available with respect to the Trump administration’s policies and appointments.
As always, please let us know if you have any questions or concerns.