“According to multiple media sources, Trump surpassed the 270 electoral votes needed to win the presidency early the morning of 11/6.”
The intense political campaigning and apparent risking polarization that characterized the 2024 election cycle is finally over. With over a quarter of Americans responding in recent polls that they did not care who won so long as the campaigning is over, we finally have our results.
According to multiple media sources, Trump surpassed the 270 electoral votes needed to win the presidency in the early morning of 11/6. Several key battleground states such as Georgia, Pennsylvania and Wisconsin swung for Trump. With seven races yet to be called, the Republicans have won 51 Senate seats, while the house is too close to be called. With two very divergent answers for many of the problems facing the country, there is an increased likelihood for meaningful changes to multiple policies over the next several years.
US stock futures and the dollar rose sharply as a Trump victory appeared more likely to occur. As we have stated in multiple election cycles, we view this more as an alleviation of election uncertainty rather than an endorsement by the markets of the outcome. In early trading on 11/6, the S&P 500 was up 1.9% and the NASDAQ 100 was up 1.95% as of 9:45 AM. There is an elevated likelihood of increased volatility in financial markets over the near term as investors digest the new Federal political regime. We strongly caution investors not to make tactical portfolio changes because of the election results; policy changes take a long time to craft and enact into legislation and an even longer time to be reflected up in company results.
In the wake of the election results, we think investors should not attempt to time market entry or exit. Managing portfolio allocations is of greater importance. Politics has less impact on the markets than some participants believe. We view the political environment as one of many overlays politics into the fundamental views; the political environment can impact the fundamentals of the company but does not dictate the fundamentals, in our opinion. Overall, we try to avoid securities that are likely to have a binary outcome based on potential policies and steer more towards securities that can have attractive returns in multiple political environments. These include oil and gas, financial services, healthcare, and high-dividend or dividend-growth segments. For bonds, inflation protection seems sensible, as do select credit positions.
Louis Tucci; Partner | Senior Investment Advisor
Paulo Aguilar, CFA, CAIA; Partner | Senior Investment Advisor
Mark H. Tucker, CFA; Portfolio Manager
David Crook; Macro Economist
Securities offered through Arkadios Capital. Member FINRA/SIPC. Advisory services through Arkadios Wealth.
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