U.S. voters have spoken, and despite the popular vote favoring Democratic candidate Hillary Clinton, the Republican nominee Donald Trump secured an unexpected electoral victory reminiscent of the 2000 Presidential Election. While there may not be any “hanging chads” there are sure to be many “hanging pollsters” in the aftermath of this result. Online markets predicted an 85% chance of a Clinton win while Nate Silver’s FiveThirtyEight.com forecast Clinton as a 71% favorite in his final prediction. As it became apparent that the Republican nominee was going to be competitive through the “rust belt”, uncertainty was introduced to the markets.
Foreign markets began trading on this uncertainty with the Nikkei Index closing down 5.36% and the Hang Seng Index off 2.16%. Aftermarket traders began moving U.S. futures significantly into the red with the Dow Jones Futures trading down by over 800 points. As the election results rolled in and electoral votes continued to stack up in favor of Donald Trump, the markets began to more efficiently price the outcome. With markets stabilizing, European markets were pricing in an increase of 1% for the FTSE index and 1.5% for the DAX and the Dow Jones Futures moving back to pre-election levels.
While the results of the election were certainly a surprise, it was not outside of the scope of possible outcomes. On the heels of the United Kingdom voting in favor of “Brexit” when polling data pointed toward a “Remain” outcome, the potential for a “Closet Trump Vote” was in the cards. While the initial surprise rattled market expectations, investors quickly processed the information and markets recovered.
We at Old Second Wealth Management focus on long term investing, and market volatility predicated from binary events often create opportunity to invest. Additionally, the changing landscape of Washington may create further opportunities or challenges within the investment markets. If you have any questions or concerns, please do not hesitate to reach out to you Old Second Relationship Manager or Investment Officer.
Please contact a member of the Wealth Management Department if you have any questions about this information.
Rich Gartelmann CFP® – (630) 844-5730 firstname.lastname@example.org
Steve Meves, CFA® – (630) 801-2217 – email@example.com
Jean Van Keppel CFA® – (630) 906-5489 firstname.lastname@example.org
Brad Johnson CFA®, CFP® – (630) 906-5545 email@example.com
Joel Binder, SVP – (630) 844-6767 firstname.lastname@example.org
Jacqueline Runnberg CFP® – (630) 966-2462 email@example.com
Ed Gorenz, VP – (630) 906-5467 firstname.lastname@example.org
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