By Staff Writer Hinton Carter
Let’s set the stage: Election Night in America 2016 at 11:42 PM. The Dow Futures is down 750 points.
Now, let’s take a step back for a minute and cover some bases first. In the US Stock Market, the S&P 500, NASDAQ, and Dow Jones Industrial are all market indexes that provide insight into the performance of the entire market as a whole at one period in time. The Dow Futures is an overnight, after-market closing view of how investors will act when the markets and exchanges reopen the next day. When the news came amidst election coverage that the Dow Futures was down 750 points, it indicated that investors were planning on heavily selling off when the market opened, leading to potential historic single day market loss, similar to what happened the day after the Brexit vote.
Many analysts actually thought it would be worse than the Brexit fallout, as the US election would naturally have had more impact on the US markets. But after Donald Trump had been announced the winner of the presidential election in the middle of the night, and subsequently when the markets opened for trading on the 9th of November, something unforeseen happened. By the end of the trading day on Wednesday, the Dow Index soared up 257 points, brushing all time highs. By the end the week, the market finished up 5%, an all time high and leading to the best week the market had tallied in five years. It is known fact that the financial markets and investors do not like uncertainty, yet it seems as if a prospective Trump presidency has brought at least short term stability and promise to the market.
To support this theory, Bill Ackman, CEO of Pershing Square Capital, a 12.4 billion dollar hedge fund and financial heavyweight in US markets, had very positive things to say about Trump being elected. “The U.S. is the greatest business in the world. It’s been undermanaged for a very long period of time. We now have a businessman as president,” stated Ackman at conference in New York City on Wednesday. As first reported by Forbes, Ackman also thinks Trump could bring about great economic benefit by returning to private ownership Fannie Mae and Freddie Mac, the currently government-owned mortgage funds. Common stock ownership of the funds has risen 70% since the election, alluding to newfound confidence by venture capitalists and shareholders alike.
Whether or not someone supported President-elect Trump in his candidacy, it’s important to recognize that the market appears to like the decision thus far. It will now be up to President Trump and a Republican controlled Congress to pass legislation that continues to brings more confidence and success in the financial markets, and the greater United States economy as a whole.