Author Topic: Impact of US election on stock market?  (Read 3793 times)

Tyler durden

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Re: Impact of US election on stock market?
« Reply #50 on: June 11, 2020, 12:24:34 PM »
https://www.nytimes.com/2016/11/10/us/trump-election-protests.html
Quote
Thousands of people across the country marched, shut down highways, burned effigies and shouted angry slogans on Wednesday night to protest the election of Donald J. Trump as president.

The demonstrations, fueled by social media, continued into the early hours of Thursday. The crowds swelled as the night went on but remained mostly peaceful.

Well you have to read past the first paragraph .... protesters started small fires / broke windows / injured police officer. ďDemonstrations led to property damageĒ

The other article ď some protestors sprayed graffiti on cars and buildings/ destroyed shop windows.

These are just 2 papers. I donít want to spoon feed it to you.
Burning an effigy or flag is a protected form of free speech in the US, and a far cry from the claimed 'burning buildings'.

talltexan

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Re: Impact of US election on stock market?
« Reply #51 on: June 12, 2020, 08:54:19 AM »
In a democracy, I'd argue that it's understandable for a little frustration when more people in a country voted for a candidate, and the person with the fewest votes wins.

My understanding of the protests that were held after Trump's election though, is that they were peaceful.  Can you provide some articles that show rioting, burning buildings, and smashing windows by Clinton supporters after Trump winning the electoral college?

The headline couldnít be better - ďNot our president: Protests spread after Donald Trumps Election ď

https://www.google.com/amp/s/www.nytimes.com/2016/11/10/us/trump-election-protests.amp.html

Second paragraph in they get to the rioting / fires and broken windows. Also goes on to talk about property damage and personal injury.

https://www.aljazeera.com/news/2016/11/anti-trump-protests-turn-violent-161111090846256.html

Another one for another news paper.

During the period you're describing, stock market did really well.

I'm not interested in debating the Trump-Russia complex of ideas on this thread, I didn't see any indication that they moved markets.

use2betrix

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Re: Impact of US election on stock market?
« Reply #52 on: June 12, 2020, 09:30:01 AM »
There are some theories that Trump is doing everything possible to prop up markets now because a large part of his election platform is based on the success of the stock market.
Didn't Obama have better S&P500 numbers than Trump?  If you're going to equate a political party with stock market performance (which I do not) - um, Democrats it is then I guess.

https://www.macrotrends.net/2482/sp500-performance-by-president

While I have often used this same logic, you do really have to consider that Obama took office at the end of a major recession, while Trump took office after 7-8 years of a strong bull market..

IMO - itís much more challenging to continue to be successful after a strong bull run, as opposed to the end of a recession.

Itíd be similar to the recent March/April market crashes instead taking place next January, and Biden taking office with the Dow at 19k instead of 29k, and giving him credit for bringing the market back up to where it was lol...

While I didnít mind Obama and thought he did a great job in many aspects, I think it should be more realistic to compare where the market ended with him, vs itís previous market peak..

Thatís just how I look at it. In regards to this upcoming election, itís easy to hate Trump for lots of things (I havenít and would never vote for him) but I have a hard time finding too many sound arguments that his policies havenít been good for the U.S. economy. The results have been at the sacrifice of many social causes and a negative reflection of our country, but for the economy, he has done well.

talltexan

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Re: Impact of US election on stock market?
« Reply #53 on: June 12, 2020, 09:52:38 AM »
The profitability of the largest corporations is just one dimension of a good and just society. Voting should be about considering many dimensions.

Our 'staches may grow more slowly depending on what changes are made to society during the next 2 1/2 years. That by itself does not rule out all of those changes as being necessary or moral.

ctuser1

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Re: Impact of US election on stock market?
« Reply #54 on: June 12, 2020, 10:03:26 AM »
... but I have a hard time finding too many sound arguments that his policies havenít been good for the U.S. economy. The results have been at the sacrifice of many social causes and a negative reflection of our country, but for the economy, he has done well.

By any objective set of measures, Trump economy is a lot of hype and not much substance. Compare it to other "socialist" periods in the American history and it comes far short.

Yes, you can legitimately question each of those objective measures (e.g. the fact that Obama took office after a recession, giving the market huge room to run), and you can also legitimately find counter-arguments to all those arguments (e.g. the fact that Obama administration held the economy together through a major systemic crisis amid the rise of the Tea Party politics was a massive achievement in itself).

However, the fact that almost any objective measure(s) (at least the ones I am aware of) you pick up seems to point in the same direction does not leave much room for confusion.


grettman

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Re: Impact of US election on stock market?
« Reply #55 on: June 14, 2020, 06:25:53 AM »
One of the strengths of Bogleheads over MMM is that threads like this get shutdown.  Besides, who the hell knows?! 

Garrett B.

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Re: Impact of US election on stock market?
« Reply #56 on: June 15, 2020, 05:43:53 AM »
One of the strengths of Bogleheads over MMM is that threads like this get shutdown.  Besides, who the hell knows?!
No one is forcing you to read this thread. And I'm not sure why it'd get shut down. It's a valid discussion.

nereo

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Re: Impact of US election on stock market?
« Reply #57 on: June 16, 2020, 12:45:26 PM »
One of the strengths of Bogleheads over MMM is that threads like this get shutdown.  Besides, who the hell knows?!

One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*.  however, money and politics cannot be separated so easily.  Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there.  That said, I post in both locations.

 

Buffaloski Boris

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Re: Impact of US election on stock market?
« Reply #58 on: June 18, 2020, 02:00:24 PM »
One of the strengths of Bogleheads over MMM is that threads like this get shutdown.  Besides, who the hell knows?!

One of the things I find frustrating about the forums over on Bogleheads is how quickly threads get locked. Often if there's even a wiff of political discussion the thread goes *poof*.  however, money and politics cannot be separated so easily.  Taxes, government programs (e.g. the ACA, unemployment, SS) are all political discussions. I prefer open discussions constrained by straight-foward forum rules, rather than the heavy-handed moderators over there.  That said, I post in both locations.

I think allowing political discussion is on the negative side of the ledger.  There is a left-of-center vibe and sometimes smarminess to things here that tends to silence or drive away other voices. And most of the politics ends up in a debate over the virtues/ evils of the current President. Itís as if some posters canít control themselves when they feel they have the merest  opportunity to shout ďOrange Man Bad!Ē There are thousands if not millions of places on the internet where you can do that all day long and have others validate that viewpoint. I donít see why itís needed here.

 Iím merely a guest. And if I donít like things Iím free to take a hike. On balance I really do like this community and the insights are well worth it. I might just take a break around the election when the political idiocy gets to a fevered pitch. 

MustacheAndaHalf

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Re: Impact of US election on stock market?
« Reply #59 on: June 19, 2020, 02:57:51 AM »
Years ago a thread I made on Bogleheads that crossed the investing/political boundary, and it got locked, and I probably got some kind of warning.  But you only know about censorship when it kicks in, and so years ago I switched over to MMM forums.

So, getting back on topic before someone notices...

The U.S. election is likely to cause volatility... but I don't know when.  The Republican candidate wants to keep tax cuts, the Democratic wants to end them.  That's probably the main thing for the stock market.

But the election also involves changing all the heads of various departments - including the Justice Department.  I think the phrase "Elizabeth Warren nominated to lead Justice Department" could send big tech shares tumbling.  She has proposed applying anti-trust to big tech.  The Democratic candidate has repeated that "Amazon pays $0 in taxes" and how that's unfair... so Senator Warren could play a role.

nereo

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Re: Impact of US election on stock market?
« Reply #60 on: June 19, 2020, 04:18:40 AM »

So, getting back on topic before someone notices...

Thank you...

The U.S. election is likely to cause volatility... but I don't know when.  The Republican candidate wants to keep tax cuts, the Democratic wants to end them.  That's probably the main thing for the stock market.


Tax cuts are one thing that markets will be interested.  Another is trade and tariffs.  The current administration has placed more tariffs than any other administration since WWII.  In response, a bunch of other countries have placed retaliatory tariffs on our exports.  Before Covid these were already having a very big impact.  Now the current administartion is threatening yet more tariffs, most recently in reponse to digital content and labor disputes.

But the election also involves changing all the heads of various departments - including the Justice Department.  I think the phrase "Elizabeth Warren nominated to lead Justice Department" could send big tech shares tumbling.  She has proposed applying anti-trust to big tech.  The Democratic candidate has repeated that "Amazon pays $0 in taxes" and how that's unfair... so Senator Warren could play a role.
The tech sector might not like Warren leading the DOJ, but what markets hate most of all is uncertainty.  And with this administration cabinet level positions have been a revolving door, with many people hired who had no experience with their appointed jobs.  A lot of industry loved having Pruitt/Wheeler at the helm of the EPA because they collectively rolled back all sorts of monitoring and protections.  But this came at the expense of 'cleaner' tech in direct competition, like wind and solar. NJ is proposing a new manufacturing hub for offshore turbines which could assemble and ship several billion$ in these enormous turbines each year.  Trump is a blockade to that, and the plans will likely be scrapped if he gets re-elected.

In sum - there will be winners and losers, but my guess is that stability and predictability will calm the markets more than anything.  In that sense I think a Biden win will tamp down volatility, because it's the exact opposite approach of Trump, who likes to be unpredictable, punitive and scoffs at norms.

talltexan

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Re: Impact of US election on stock market?
« Reply #61 on: June 19, 2020, 06:55:22 AM »
Note: volatility can also mean volatility to the upside.

nereo

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Re: Impact of US election on stock market?
« Reply #62 on: June 19, 2020, 07:26:34 AM »
Volatility is non-directional. You can have high volatility with a bull market, or high volatility with a beat market.
I think the direction of the market wonít change much beard on who is in charge -presidents get far too much credit/blame for broader movement. But he CAN influence volatility to a greater degree, IMO

ctuser1

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Re: Impact of US election on stock market?
« Reply #63 on: June 19, 2020, 07:33:41 AM »
I am tentatively in the camp of elections don't matter for markets.

If you go by strict numbers, the economic growth rate from Truman to Obama is generally better under democratic administrations than republican (4.3% vs. 2.5%). I haven't looked up the actual market data - but that would likely show a similar pattern with lower volatility (since markets anticipate and "discount" the future).

However, I am afraid this election can be norm-breaking in many ways. I'd be surprised if some sort of black swan does NOT show up between now and January. So, all bets are off!!


MustacheAndaHalf

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Re: Impact of US election on stock market?
« Reply #64 on: June 19, 2020, 11:43:02 AM »
Maybe to put the election in rough perspective, here's a partial list of things more impactful to stock market prices than the election:
(1) News of COVID-19 treatments and vaccines.  The hope of going back to normal.
(2) Hints at new lockdowns, like new cases rising.  Fears that the economy will get hurt again.
(3) Actions by the Fed.  Predicting 0% rates for 2021 (because it's bad), or confirming they'll buy bonds.
(4) Congress, usually acting at the last minute with relief packages.
(5) Tariffs and trade wars, impacting import/export profits.
(6) Oil prices and OPEC, partially because fuel usage is one measure of economic activity
...
And somewhere down here, predictions of who wins the next Presidential election.


nereo - I think markets have adapted to President Trump's style, which brings down some volatility and uncertainty.  But volatility spiked in March with COVID-19 cases, and will probably continue owing to the great uncertainty with where we end up months from now.  Companies can't even predict future earnings.

I suspect the market underestimates how much Senator Warren could impact markets.  A majority of the S&P 500's profits for the past 12 months came from the 5 largest companies - they contributed far more than the rest of the market, combined.  When that 20% of the market suffers, people might not realize how big an impact that can have.  I'm not even saying I disagree with the need for competitive markets and anti-trust actions, but I think the markets underestimate the chances.  In fairness, the EU is more likely to act first (and already has started to, I believe).  And those cases take years, so reacting now might be too soon.


I guess the other question is... if this October/November will be very volatile for markets, what do we do about it?  Maybe delay rebalancing or perform more rebalancing during that time frame (for those staying the course).  I'm not familiar with options, but they seem like the most likely manner of capturing volatility.

ChpBstrd

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Re: Impact of US election on stock market?
« Reply #65 on: June 19, 2020, 12:37:45 PM »
I am tentatively in the camp of elections don't matter for markets.

Maybe not in a day-trading perspective, but long-term a lot of things are being decided.

There might be nothing more 20teens than the attitude that leadership doesn't matter, and that a few simple mantras are all that's required to make decisions. Let's hope the year 2020 marks the end of that fad.

ctuser1

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Re: Impact of US election on stock market?
« Reply #66 on: June 22, 2020, 03:41:40 PM »
I am tentatively in the camp of elections don't matter for markets.

Maybe not in a day-trading perspective, but long-term a lot of things are being decided.

There might be nothing more 20teens than the attitude that leadership doesn't matter, and that a few simple mantras are all that's required to make decisions. Let's hope the year 2020 marks the end of that fad.

I believe, long term, the stock market performance will depend on two factors:
1. demographics, increasing or decreasing the population component of the "secular rate of growth".
2. innovation, this is productivity multiplier component of the "secular rate of growth".

There sure are other shorter term factors (e.g. transfer of economic activity from small businesses to the larger, listed ones during the pandemic). But they are likely one time and will only look like blips in the long term return.

So far, elections have not impacted these two factors. However, going forward, they might!!

-------------------------------

Going slightly off topic.

For #1, the quick fix is immigration. That seems to be getting impacted with this administration (they just announced that all work visa's will be suspended). Long term, will at least the current levels be maintained? I'm hopeful, but not sure.

For #2, there are no easy answers. Immigration plays an indirect role. But there are far more complicated sociological factors at play as well. A nice NYTimes article on "Lost Einsteins": https://www.nytimes.com/2017/12/03/opinion/lost-einsteins-innovation-inequality.html

talltexan

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Re: Impact of US election on stock market?
« Reply #67 on: June 23, 2020, 01:21:50 PM »
Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.

ChpBstrd

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Re: Impact of US election on stock market?
« Reply #68 on: June 23, 2020, 03:24:06 PM »
Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.

If Trump loses, the party will be split between the nativists and those who want the votes of a demographic that based on income, educational attainment, and religiosity should be Republican. ďWĒ sided with the integrationists. Trump is with the nativists.

It is the parallel to the moderates vs. socialists divide in the Democratic Party.

The question is whether Trump has branded the Republican Party forever in the eyes of Hispanic voters who would otherwise agree with them. If that is the case, the next Republican presidential candidate will be an integrationist and will likely fail.

Buffaloski Boris

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Re: Impact of US election on stock market?
« Reply #69 on: June 23, 2020, 05:40:58 PM »
Really the immigration issue marks the most dramatic reversal of the Republican party in our generation. George W. Bush was trying to use his shredded political capital to reform it in 2007 (he couldn't), but I don't see how today's republicans could ever be treated credibly if they try to do something apart from ending it as Trump has.

If Trump loses, the party will be split between the nativists and those who want the votes of a demographic that based on income, educational attainment, and religiosity should be Republican. ďWĒ sided with the integrationists. Trump is with the nativists.

It is the parallel to the moderates vs. socialists divide in the Democratic Party.

The question is whether Trump has branded the Republican Party forever in the eyes of Hispanic voters who would otherwise agree with them. If that is the case, the next Republican presidential candidate will be an integrationist and will likely fail.

I think it more likely that the red team is out of power for awhile.  And we'll get to experience a blue team kakistocracy in the mean time.   

We can always hope that one or both of the factions of the duopoly will fall off the map like the Whigs did.  It's unlikely: both factions have spent the last 160 years refining new and better ways to preserve and extend their power. 

Not much difference as investments go.  There might be a drop if the blue team tries to claw back the 2017 corporate tax cuts, but I don't think it likely.     
« Last Edit: June 23, 2020, 05:42:29 PM by Buffaloski Boris »