2024 Post Election Follow-Up

Election Year At-A-Glance

Since our June 20th post: “Election Year Investing: What Investors Need to Know for 2024” a lot has happened. We went through the chaos that comes with every campaign season. Including President Biden stepping down with Kamala Harris chosen to represent the Democrats at the DNC. As well as an assassination attempt on President Trump. Then, the final cumulation of the Presidential Election on November 5^th.  

Through all this change, our original article holds true. Let’s look at what we wrote and glance at what might be ahead. Rest assured, we are the greatest nation on Earth and our economic engine and strength continue to grow. This strength is reflected in the U.S. stock markets.  

In June, we focused on historical data around election times. At that time the markets were up around 11% and we are currently up a remarkable 25% on the year. We did not see the malaise in markets that usually occurs in the Presidential election year. As we know now, the markets have run up over 4% election week alone – more on that later.   

2024 Post Election Thoughts

History Is On Our Side

As the charts below reference, we wrote about the expectations of a positive year regardless of the victor. We also talked about the odds favoring a positive 4-year return in the markets regardless of who won. These continue to be our base assessment post-election.  

As we briefly discussed, the markets track the economy more than just about anything else. Our economy is strengthening in most areas, and we project 2025 and 2026 to continue that trend. Corporate earnings have improved, the FOMC/FED reserve has begun reducing interest rates, the pace of inflation growth has come down, and stocks are reflecting these improving dynamics. We still have significant concerns in the employment data that has been trending down for 18 months. As well as real wages, the value of wage growth to cost of good growth (inflation), which is still negative over a 3-year period.  

What’s To Come?

So, what can we expect out of a Trump 2.0 administration as it relates to market impacts and investments? With the Republicans gaining control of the Senate and holding the House it is significantly more likely the current Tax Cut and Job Act will extend past its scheduled 2025 sunset. This is supportive of a stronger GDP and stock market. On the other side, we should expect greater market volatility due to economic policies such as the use of Tariffs.

While we could dive deeper into what a Trump 2.0 presidency could look like, I want to remind readers that the markets reflect the economy and individual companies’ health. With data pointing to strong economic and hopefully improving employment data, that leads us to a base scenario of growth for the near future. Economic policies, changes, tariffs, etc. will certainly alter some of the expectations.

As these changes are rolled out, we will alter our planning accordingly. Our job is to see the facts and do our best to ignore the noise, while eliminating the emotions and fears we often have in times like these. We empathize with those concerns, and we encourage you to connect with us to discuss. However, we remain optimistic about the future of our economy and the markets. Afterall, the odds are on our side with 11 out of the last 14 (including President Biden) presidential terms being positive markets.