The economic policies being proposed by President -Elect Trump are not what we would traditionally expect from a Republican heading to the White House. Mr. Trump’s proposals, if enacted, would rely on increased borrowing to fund economic expansion, most notably on infrastructure and defense spending. Markets have quickly priced in the rising probability of this type of deficit spending by adjusting expectations for future growth in GDP and inflation. As such, bond prices have fallen and interest ... [Continue Reading]
Politics and Markets
Articles and resources related to Politics and Markets.
As election results started to pour in on Tuesday night, the surprise outcome of a Donald Trump victory rippled throughout international markets. U.S. stock futures fell more than 5% as the uncertainty of what was happening led to a risk-off trading environment. By noon on Wednesday, not only had markets completely recovered from those losses, but they were well on their way to strong gains. While there are many uncertainties about our future, and questions to be answered regarding what type ... [Continue Reading]
While, as we write, broad equity markets are performing significantly better than futures markets had indicated they would last night, we still wanted to reach out regarding yesterday's election results and the related short-term market impact. Certainly the impact of the election carries with it a vast array of implications for the U.S. and the world. We want to be very cognizant in recognizing that and pointing out that our focus today for this message, and our activities today at CCM, are ... [Continue Reading]
Periodically during a presidential election cycle, we receive questions from clients about the desirability or wisdom of altering the composition of a portfolio based on what might unfold after the election. Dimensional Fund Advisors recently published an excellent new article addressing this topic titled, “Presidential Elections and the Stock Market.” In this article, Dimensional finds that historically, volatility and returns are not noticeably different based on which political party is ... [Continue Reading]
Summertime fireworks came a few weeks earlier than usual this year. But instead of blues, yellows, and greens, the early fireworks were a solid red. After strong recoveries from February lows, equity markets across the globe were jolted from their upward trajectories as they priced in the result of the British referendum to leave the European Union. The reaction of markets to the news of a “Brexit” was felt far and wide with stocks around the world shedding trillions of dollars on a single ... [Continue Reading]