Decisive Trump Victory Sends Stocks Soaring
by Sequoia Financial Group
by Sequoia Financial Group
Markets braced for volatility last week, with the presidential election and a Federal Reserve meeting waiting in the wings as big potential market movers. Tight polls and slow ballot counts presented a risk that the winner of the election would not be immediately known. Thankfully, that concern was quickly put to rest as swing-state results quickly pointed to a clear Trump victory. Meanwhile, the Fed met market expectations by delivering a quarter-point interest-rate cut, indicating that economic activity continues to expand, and that inflation continues to progress toward the Fed’s 2% target.[1] The stock market celebrated the outcomes of both the election and the Fed meeting, with the S&P 500 and Dow Jones Industrial Average reaching new milestones. The S&P 500 eclipsed 6,000 and the Dow Jones briefly topped 44,000. Both indices jumped more than 4% for the week, while the NASDAQ fared even better, rocketing more than 5% higher.[2]
Bank stocks were among the biggest winners. JP Morgan, Goldman Sachs, and others shot up more 10% on Wednesday following Trump’s victory. Wells Fargo analyst Mike Mayo said Trump’s win will usher in a new era for banks, as a Trump presidency could lead to fewer banking regulations and increased deal-making activity.[3] On the other hand, green energy stocks slumped, as Trump plans to kill off-shore wind projects. The iShares Global Clean Energy ETF bottomed at a 52-week low.[4]
Lost in the election enthusiasm were earnings reports from Qualcomm, Lyft, and Rivian. Strong earnings and positive guidance boosted Qualcomm. Meanwhile, Lyft jumped more than 20% after beating market expectations for bookings and earnings.[5] And though Rivian’s revenue slipped 35%, the EV maker’s full-year delivery forecast provided the stock a small lift.[6]
Trump won’t officially take office until January 20 but, barring any big change, he’ll inherit a booming stock market, a growing economy, and falling interest rates. Attention will now turn to his policies and their possible impact on the economy and inflation. Bond prices dropped on Wednesday, reflecting some concern on that front, as promised tax cuts could add to the growing Federal debt and put upward pressure on interest rates.[7] For the week, however, the bond market eked out a small gain.
Trump will surely remain in the headlines, but we’ll turn our attention this week to CPI and PPI, to be released Wednesday and Thursday, respectively. We’ll also get fresh reports on retail sales and jobless claims, and earnings reports from Home Depot, Disney, and Cisco.
[1] https://www.federalreserve.gov/newsevents/pressreleases/monetary20241107a.htm
[2] https://www.cnbc.com/2024/11/07/stock-market-today-live-updates.html
[3] https://finance.yahoo.com/news/wall-street-scores-political-victory-with-a-trump-win-this-should-aid-all-banks-132842180.html
[4] https://finance.yahoo.com/quote/ICLN/
[5] https://finance.yahoo.com/news/fed-decision-boosts-stocks-movers-200016712.html
[6] https://finance.yahoo.com/news/rivian-stock-drops-as-full-year-loss-projection-widens-but-modest-gross-profit-still-expected-in-q4-145658933.html
[7] https://www.cnbc.com/2024/11/05/stock-market-today-live-updates.html
The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.
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