Market Reactions to President Trump
As most of you are aware, markets have responded sharply to the election of Donald Trump. Some markets have responded favorably; others unfavorably. See below as we break down the top- and bottom-performing sectors of the market since November 8, 2016.
Here are the highlights:
- Top-performers: The leading sectors in the Trump rally include financial stocks, U.S small capitalization stocks, and energy stocks. The market has supported valuations on the new administration’s promise of less regulation, friendlier business policies, and better trade deals.
- Bottom-performers: The laggards include gold, U.S. bonds, and emerging markets stocks. The most notable item here is the price of bonds, which have gone down based on expectation that interest rates are more likely to go up under the new administration. When interest rates go up, bond values go down (click here to read our in-depth explanation).
- Bottom-line: The actual results of policies put in place over the next 4 years may take years to come to fruition. While we have seen rallies in some areas and selloffs in others, our outlook remains positive and our confidence in free markets strong.