Republicans Have Historic Night
November 9, 2016
Whether you are a Republican or a Democrat, Donald Trump’s win came as a shock to the world. The U.S. market’s initial reaction was a free fall drop. The S&P 500 futures were down over 6% overnight. Foreign markets that were open fell. For example, the Hong Kong Hang Seng Index was down over 2% and the Japanese Nikkei 225 Index dropped over 5%. As investors began to digest the election results and listened to speeches by Donald Trump, Hillary Clinton, and President Obama, the S&P 500 calmed down, shook off early loses, and finished up 1.11% on Wednesday.
Our client base is made up of the full spectrum of political beliefs. As I have stated in prior e-mails which have discussed the impact politics have on the markets, I will remove my personal political beliefs and write only about what I consider to be facts. As you read this, I encourage you to try to be as clinical as possible about what may lie ahead for the markets under a Donald Trump presidency.
Last night’s election has guaranteed that the Republican Party, come January, will be in control of the House of Representatives, Senate, and the presidency. So what does this historic election mean to you as an investor?
With all of this in mind, what areas of the market should benefit from a Trump presidency?
- Energy: While there will still be pressures on West Texas Intermediate oil prices over $50 per barrel (due to worldwide oversupply of oil and dormant oil shale rigs ready to come online when production would be profitable), this sector should face less regulatory intervention from the Republican government.
- Defense: Trump has campaigned for making the U.S. military stronger.
- Banking: Like energy, the banking industry should see an easing of some constraints currently placed on them from the current administration.
- Health Care: Some areas of the health care sector, like biotech and pharmaceuticals, should benefit from Trump being in office. Large health care providers supporting the Affordable Care Act are at significant risk of seeing their earnings impacted by the potential repeal.
- Industrials: Trump has stated that he wants to spend a lot of money on our aging infrastructure.
On Friday, January 20, 2017, Donald Trump will become the 45th President of the United States. Whether you voted for Trump or Clinton, we now need to concentrate on how to navigate our future markets under his leadership. As Hillary Clinton said in her concession speech, “I still believe in America and I always will. And if you do, then we must accept this result and then look to the future. Donald Trump is going to be our president. We owe him an open mind and the chance to lead.”
Polaris Greystone is dedicated to tactically managing your portfolio. We use technical research, fundamental research, sentiment indicators, and macro-economic indicators to help us make clinical investment decisions in your portfolio. We will work with our data to increase or decrease your exposure to the stock market based upon the risk we determine is in the markets. We are confident that we will be able to successful navigate our future markets and help you to successfully accomplish your long-term financial goals.
As always, I welcome your comments and questions.
Jeffrey J. Powell
Polaris Greystone Financial Group, LLC is a federally registered investment adviser. The information, statements and opinions expressed in this material are provided for general information only, are based on data we believe to be accurate at the time of writing, and are subject to change without notice. This material does not take into account your particular investment objectives, financial situation or needs, is not intended as a recommendation to purchase or sell any security, and is not intended as individual or specific advice. Investing involves risk and possible loss of principal capital. Diversification does not ensure a profit or protect against a loss. Advisory services are only offered to clients or prospective clients where Polaris Greystone Financial Group, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Polaris Greystone Financial Group, LLC unless a client service agreement is in place.