Tranel Talks Column

Market Status Update – Post Election

The election process is complete and we thought it would be beneficial to share some insights regarding post-election stock market trends. This update will be a little longer than the previous posts to encompass the last two weeks.

For the week ending November 6th:

  • DJIA – up 6.9%
  • S&P 500 – up 7.4%
  • NASDAQ – up 9.0%

After the markets dropped by around 6% in the week leading up to the election, the major indexes rebounded strongly, recovering the losses and then some. Much of the reaction can be attributed to the likelihood of a continued divide between the White House, the Senate, and the House. This is leading investors to believe that favorable tax and regulatory changes made in the last few years will stick around for at least another two years. Additionally, expectations for a future stimulus bill look to be improving, bringing more stability to the market post-election.

For the week ending November 13th:

  • DJIA – up 4.2%
  • S&P 500 – up 2.2%
  • NASDAQ – down 0.5%

The markets continued to mostly rise again last week on news of a COVID vaccine trial by Pfizer. The 90% success rate sent the market soaring on Monday. While some of those gains were parred later in the week with news that virus cases continue to spike all over the United States and Europe. Tech stocks cooled off a little bit last week leading the Dow to outperform the S&P and the tech-heavy NASDAQ.

YTD Performance:

  • DJIA – up 5.4%
  • S&P 500 – up 12.8%
  • NASDAQ – up 32.9%

Since January 1st of 2020, the best performing sector styles have been in this order: Large Growth, Mid Growth, Small Growth. The worst performing sector styles have been: Small Value, Large Value, Mid Value. This makes a great deal of sense looking at how the major indexes have performed year-to-date. At some point, it would be expected for this to even out a bit given that we are still in the middle of a pandemic and unemployment remains high.

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Some additional notes:

  • Two Georgia Senate races are headed for a run-off on Jan. 5th. If the Democratic candidates win in both elections, the Democratic Party will flip control of the Senate with a 50-50 split and Vice-president elect, Kamala Harris, being the tie-breaking vote. This is worthy to note because this would flip the power completely to the Democratic party and may signal more dramatic changes to tax laws and regulations.
  • Early this morning, Moderna’s COVID-19 Vaccine reported as 94.5% effective in early results. This good news backs up the positive results from Pfizer, reported last week.
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