November 15, 2016

A Week of Surprises

Last Tuesday, many Americans watched in great surprise as Donald Trump won our presidential election. Just that day, the New York Times had placed Hillary Clinton’s odds of winning at 85%, based on a range of state and national polls. But, like the Brexit vote this past June, 2016 seems to be the year of unexpected outcomes. As predicted, the markets initially reacted to uncertainty as they often do: with losses. Futures for the Dow, NASDAQ, and S&P 500 all dropped at least 4% in the middle of the night after Trump’s win. But come Wednesday morning, everyone was in for another surprise. Despite many predictions that the markets would sell-off if Trump won, all of the major U.S. indexes ended the week ahead. The S&P 500 was up 3.80%, the Dow gained 5.36%, NASDAQ increased 3.78%, and MSCI EAFE added 0.05%. The Dow even closed at an all-time high on Thursday and posted its best week since 2011, despite being slightly down on Friday. Needless to say, these two developments last week gave significant surprises for most people. Let’s look a bit deeper at the market’s reaction and what may lie ahead. Understanding the Rally The markets hate uncertainty, […]