Stocks Cheer Election Result | The Investors Edge [Video]

By John Stewart, chief investment officer at Farmers Trust Co.

The stock market seemed quite happy with the results of the election on November 5^th.  The S&P rose roughly 5% in the week following the election, and more economically sensitive small cap stocks were up roughly twice that much.

So why is the market so happy?  Well, for one, there was some fear that the election result could have been unclear, too close to call, or contested for accuracy.  So the clarity of the result is something that markets always prefer.

In addition, the election of Donald Trump is broadly seen as pro-business, good for keeping taxes low, and likely to bring reduced regulatory burdens, all things that stocks tend to prefer.

Alternatively, opponents of Trump claim his desire to raise tariffs could prove inflationary and harm global trade. That remains to be seen, but for now the markets seem to be less concerned about those things and more …