Hello,

President Trump has won reelection; what does that mean for investors?

Let's discuss.

As of writing, Republicans have won the White House and a Senate majority, and may win a House majority.¹

Markets reacted to the news by rallying to new record highs.²

Does that indicate they see president-elect Trump's promises as favorable for stocks?

Or is it simply a reaction to an end to election-related uncertainty?

History can offer us some clues.³

On average, stocks tend to rise after an election after a small short-term drop.

But you can see in the chart below that the last two elections have resulted in an immediate pop. 

Will this year's positivity remain? We'll see.

While past performance is a guide, it's not a guarantee.

Markets are likely to remain volatile in the weeks ahead as investors digest data and adjust their positions ahead of the new year.

Longer term, what can we expect for the economy?

The Federal Reserve recently voted to cut interest rates again.⁴

While small rate cuts may not make an immediate impact on the consumer rates you see, they start to add up over time.

If the Fed continues on the rate-cutting path, we could expect to see a cumulative impact on mortgage rates, credit cards, and other consumer and business debt next year.

President-elect Trump campaigned on major economic issues such as tariffs and tax cuts.

Generally speaking, tariffs are considered to be inflationary because they increase the cost of goods.⁵

However, the economic impact will largely depend on the size and breadth of any tariffs imposed as well as overall economic conditions.

Tax cuts generally help spur growth (though they can add to the national deficit), and we can expect that many provisions of the 2017-era cuts will be extended after 2025.⁵

Overall, we'll see what the new administration chooses to prioritize and how much sway Congress will exert on the agenda.

Bottom line: who wins an election is just one factor affecting markets and investors.

As we approach the final weeks of 2024, we're thinking ahead to 2025 and evaluating moves for our clients.

We’re watching the markets and the economy and will reach out with updates as needed.

If you've got big feelings about the election or feel pressured to make some big portfolio changes, please reach out.

We'll schedule a time to chat and talk through your thoughts.

Your confidence and comfort are our biggest priorities.

Warmly,

Your Eagle Wealth Team

The Week on Wall Street

Stocks surged higher last week, fueled by the Fed’s rate cut decision and post-election enthusiasm as investors looked to future policy impacts of a Republican-controlled Senate and executive branch. (The House of Representatives remains undecided.)

The Standard & Poor’s 500 Index spiked 4.65 percent, while the Nasdaq Composite Index gained 5.74 percent. The Dow Jones Industrial Average rose 4.61 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, was flat (-0.02 percent).^6,7

Stocks Extend Rally on Election News

It was a shaky start to the week for stocks as investors anxiously awaited election results and the Fed’s interest-rate decision.⁸

On Election Day, stocks rallied broadly before polling places closed. After the election was called early the next morning, stocks opened higher and climbed throughout the trading session. The yield on the 10-year Treasury fell to 4.307 percent.^9,10

Stocks opened higher Thursday, and the rally picked up momentum after the Federal Reserve approved its second consecutive interest rate cut. Economic news that showed a 2.2 percent rise in third-quarter productivity helped support the move.^11,12

Stocks finished the week with a number of records: the S&P 500 crossed the 6,000 mark, and the Dow breached 44,000 for the first time on Friday. While the S&P and Dow closed slightly below those record levels, each had their best week in a year.¹³

Fed Cuts Rates

As expected, the Federal Reserve cut interest rates by a quarter percentage point at its November meeting.

However, Fed Chair Jerome Powell signaled some uncertainty about the pace of future rate cuts, which slightly unsettled the markets.

Citing a desire to “steer between the risk of moving too quickly and perhaps undermining our progress on inflation, or moving too slowly and allowing the labor market to weaken too much,” Powell said the Fed will continue to monitor the economy’s progress.¹⁴

<sup>Past performance is not a guarantee of future results. Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance.

Source: YCharts.com, November 9, 2024. Weekly performance is measured from Monday, November 4, to Friday, November 8. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.</sup>

1. https://www.270towin.com/2024-election-results-live/
2. https://www.cnbc.com/2024/11/05/stock-market-today-live-updates.html
3. https://www.cnbc.com/2024/11/04/what-the-stock-market-typically-does-after-the-us-election-according-to-history.html
4. https://www.cnbc.com/2024/11/07/fed-rate-decision-november-2024.html
5. https://www.wsj.com/economy/what-a-trump-win-means-for-the-economy-50de4670

Article Chart Source:
https://www.cnbc.com/2024/11/04/what-the-stock-market-typically-does-after-the-us-election-according-to-history.html

<sup>6. The Wall Street Journal, November 8, 2024
7. Investing.com, November 8, 2024
8. CNBC.com, November 4, 2024
9. CNBC.com, November 5, 2024
10. The Wall Street Journal, November 6, 2024
11. The Wall Street Journal, November 7, 2024
12. MarketWatch.com, November 7, 2024
13. The Wall Street Journal, November 8, 2024
14. The Wall Street Journal, November 7, 2024</sup>

^{Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.}

^{The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.}

^{The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.}

^{The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.}

^{U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.}

^{International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.}

^{Please consult your financial professional for additional information.}

^{This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.  Copyright 2024 FMG Suite.}