How Will the Markets React to a Trump Loss in 2020?

How Will the Markets React to a Trump Loss in 2020?

August 28, 2019

We’re regularly asked how markets will react after to a Republican or Democratic victory in the 2020 Presidential Election. Chief Investment Officer Jim Lowell discussed this topic in our recent quarterly webinar*: Tariffs, Trade and Trump.

Please enjoy the excerpt below and click here for the full webinar replay to hear more.

* * * * *

Jim Lowell: One of the things that we know is that the markets can react fairly dramatically in a very short-term time period—whether President Trump is or is not reelected. One might suspect that we’ll see some volatility, both going up to and through the election time period.

But then the markets will, very quickly, reprice to what they think they know about the fundamentals. The key concerns for the markets over time are always going to be earnings, interest rates and economic data that supports either more economic growth domestically and globally—that’s expansion, or less global growth and domestic growth. That’s contraction.

What we’re seeing right now is obviously a very challenging environment.

The Fed has done a great job of walking us through the ways in which they see this environment has been challenging to them despite the fact that our economy remains in healthy, slow-growth not no-growth mode and that the U.S. consumer, the driver of our economy, is in absolutely good shape.

The Fed continues to mention the term “cross-currents” and what they’re really pointing to are things like concerns over tariffs, concerns over policy and real concerns over the rate of global growth, which is slowing not growing—and perhaps more measurably than one might want to think in China and Germany posting its seventh consecutive contraction in terms of purchasing managers’ indexes. Germany is the leading economy inside of the E.U., and that means that the E.U., as a whole, is very low-growth, more vulnerable to no growth, so we may not be there yet.

But the Fed is certainly vigilant and concerned that we may get dragged into some sort of economic downturn. I think that’s what the market’s going to be focused on, both now and after whomever the next president of the United States of America will turn out to be.

* * * * *

For more information about the potential impact—or lack thereof—that politics is likely to have on your investments, read our free report Focus on Market Cycles, Not Election Cycles.

Click here for a replay of Tariffs, Trade and Trump. Please contact us at (800) 492-6868 to learn more about comprehensive wealth management solutions.


*Webinar recorded after the market closed on July 24, 2019.

This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.

Past performance is not an indication of future returns. We do not provide legal or tax advice, nor sell insurance products. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Always consult an attorney or tax, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.

Companies mentioned in this article are not necessarily held in client portfolios and our references to them should not be viewed as a recommendation to buy, sell or hold any of them.

The Adviser You Can Talk To Podcast is a trademark of Adviser Investments, LLC. Registration pending.

© 2019 Adviser Investments, LLC. All Rights Reserved.

Tags:

stock market

85 Wells Avenue, Suite 109 Newton, MA, 02459

info@adviserinvestments.com 1.800.492.6868

Adviser Investments' logo is a registered trademark of Adviser Investments, LLC.