Stock markets do crazy things during an election. The Dow rose 257 points the day after the election, and the S&P 500 and the NASDAQ rose by 1.1% each. However, on Tuesday, Dow futures were down 900 points and there was a 4% drop in crude oil prices.
Global markets also suffered some loss after the election. Both the Mexican peso and the British pound fell 9%, and the Japanese market fell sharply with a 5% drop in the Nikkei 225. In addition to these, the Euro has also gone down in value.
There was some rising, though. Big banks rose their interest rates, with JPMorgan Chase rising 5% and a 7% increase for Morgan Stanley. Defense stocks, such as Lockheed Martin and Raytheon, also rose.
Though there were some large drops, the odd behavior of the market during and just after the election is nothing to fret over. Presidential elections normally cause strange behavior in the market. According to Anne Smith, Senior Editor of Kiplinger, “The stock market has, for the most part, ebbed and flowed with the four-year election cycle for the past 182 years.” Bear markets and recessions are common trends during a president’s first two years, and bull markets and prosperous times tend to occur in the final two. For example, the Dow Jones, ever since 1833, has gained an average of 10.4% the year before an election, but normally drops to 6% during the election year. And as for concerns about which party wins the White House, Smith says those concerns are “unwarranted—at least from an investing standpoint.” As can be seen, there is really no need to worry over your investment portfolio after an election.
As for the current market, the Dow is at +0.19%, the NASDAQ is at +0.74%, and S&P is at +0.47%. Oil is at $44.93 per barrel, gas is at an average of $2.70, gold is at $1,217.30, and silver is at $16.80. Japan’s Nikkei is at 0%, London’s FTSE 100 is at +0.67%, Germany’s DAX is at +0.20%, and Hong Kong’s Hang Seng is at -0.08%. The exchange rate for the Euro is $1.06, for the British pound it is $1.24, and the Canadian dollar is at $0.74. Some of the most popular stocks include Fitbit Inc., Cisco, American Airlines, Wal-Mart, and Macy’s.
Hopefully, as a new year comes, the market will continue to rise and rebound. It is just a matter of waiting to see.