Historically, we consider the first 90 days of an administration to be critical to the long-term success of that administration. A tone is established through the policies proposed and implemented. How that tone is interpreted by the public market and supporting economy drives decisions made by corporations and industry. From these decisions economic activity, both positive and negative arise.

While evaluating this period is informative, we felt here at Brackens Financial Solutions Network that history was ignoring an equally important period of time: The market experience for the 90 days immediately following the election of a New President. This year’s election (November 5th, 2024) presents us with a unique opportunity to compare and contrast market activity for the Major Indices for the 90 days following the Election of Donald Trump with that of November 9, 2016.

This document is a Data Overview of the Trump Election Period examining these three questions:

1. The reaction of the four major market indexes for the first 90 days immediately following the 2016 US presidential election.

2. When was the last time we had fully coordinated government at President, Senate, House of Representative and Conservative Court? What was the market reaction, as measured from the four indices during this period.  

3. Once the new administration was sworn in, what policy changes were implemented in the first 90 days? What was the market activity, as measured by the indices for the first 90 days during these policy changes.

Only once before, has there been a president that did not serve in consecutive terms, Grover Cleveland. The election of November 5th, 2024, gives us a rare opportunity to look back critically into the election of Donald Trump on November 2016  for patterns and possible opportunities in market activity.   History is no guarantee of future returns, but historical facts should always be a factor in future decisions.

We thank Pramod Mali, Intern: Master of Science in Financial Mathematics, Syracuse University Martin J. Whitman School, for analyzing this set of questions. His expertise in finance, credit risk management, and strategic analysis., helped inform our review of this unusual set of political and economic circumstances.

Vicki Brackens ChFC

President, Brackens Financial Solutions Network

Weekly Report (2016 vs 2024 Trump Market)

WEEK 1 REPORT: NOVEMBER 5-8, 2024

WEEK 2 REPORT: NOVEMBER 11-15, 2024

WEEK 3 REPORT: NOVEMBER 18-22, 2024

WEEK 4 REPORT: NOVEMBER 25-29, 2024

WEEK 5 REPORT: DECEMBER 2-6, 2024

WEEK 6 REPORT: DECEMBER 9-13, 2024

WEEK 7 REPORT: DECEMBER 16-20, 2024

WEEK 8 REPORT: DECEMBER 23-27, 2024

WEEK 9 REPORT: DECEMBER 30, 2024-JANUARY 03, 2025

Reaction of All indexes for first 90 days after 2016 US presidential election.

S&P 500

Based on the information provided in the search results, we can analyze the S&P 500's performance in the first 90 days following the 2016 U.S. presidential election:

Initial Reaction

On the day after the election (November 9, 2016), the S&P 500 showed a positive reaction:

• The index closed up over 1% for the day, despite futures having fallen more than 5% in premarket trading when the election results became clear. (https://www.forbes.com/sites/kristinmckenna/2020/08/18/heres-how-the-stock-market-has-performed-before-during-and-after-presidential-elections/)

90-Day Performance

The S&P 500 exhibited strong positive performance in the 90 days following the 2016 election:

1. From November 9, 2016, to year-end (December 31, 2016):
   • The S&P 500 increased by 4.64%.
2. From January 1, 2017, to January 20, 2017 (Inauguration Day):
   • The index gained an additional 1.45%.
3. Total gain for the approximate 90-day period:
   • The combined increase from November 9, 2016, to January 20, 2017, was about 6.09%. (https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/files/Zeckhauser_final_2017-01.pdf)

Key Observations

1. Sustained Upward Trend: The market showed a "sustained surge" following the election, which was unexpectedly given pre-election predictions.
2. Gradual Incorporation of Information: The market's reaction was not instantaneous. There was "a gradual incorporation of expectations about tax and trade policies into market prices, particularly in the days immediately following the election". (https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/files/Zeckhauser_final_2017-01.pdf)
3. Above-Average Returns: The 6.09% gain over approximately 90 days was significant, especially considering that the average annual return for the S&P 500 in election years from 1928-2016 was 11.28%. (https://advisor.morganstanley.com/the-ernie-garcia-group/documents/field/e/er/ernie-garcia-group/S&P%20500%20in%20Presidential%20Election%20years.pdf)
4. Contrast to Predictions: Prior to the election, it was widely believed that the stock market would fall significantly if Trump were elected. The actual market reaction contradicted these expectations.
5. Volatility: While specific data is not provided, the unexpected outcome likely led to increased market volatility during this period.

In conclusion, the S&P 500 reacted positively in the 90 days following the 2016 election, with a total gain of about 6.09%. This performance was contrary to many pre-election predictions and represented a significant upward trend in a relatively short period.

DJIA - Dow Jones Industrial Average

To analyze the performance of the Dow Jones Industrial Average (DJIA) in the first 90 days following the 2016 U.S. presidential election, the data from November 9, 2016 (the day after the election) to February 7, 2017.

Initial Market Reaction

On November 9, 2016, the day after the election, the DJIA opened at 18,332.74 and closed at 18,589.69, showing an immediate positive reaction to the election results.

90-Day Performance

Here is a detailed breakdown of the DJIA's performance over the 90-day period:

1. Starting point (November 9, 2016): 18,589.69
2. Ending point (February 7, 2017): 20,090.29

The DJIA experienced a significant upward trend during this period, with several notable milestones:

• November 22, 2016: DJIA closed above 19,000 for the first time, reaching 19,023.87.
• January 25, 2017: DJIA closed above 20,000 for the first time, reaching 20,068.51.

Key Statistics

1. Total gain: 1,500.60 points
2. Percentage increase: Approximately 8.07%
3. Average daily closing price: The average closing price during this period was around 19,500 (estimated based on available data)

Notable Events

1. December 30, 2016: The DJIA closed the year at 19,762.60.
2. January 3, 2017: The first trading day of 2017 opened at 19,881.76.
3. February 7, 2017: The DJIA closed at 20,090.29, marking a strong performance over the 90-day period.

Market Volatility

• While the overall trend was positive, there were some fluctuations:
• The lowest closing price during this period was on November 9, 2016 (18,589.69)
• The highest closing price was on February 7, 2017 (20,090.29)

Comparison to Historical Performance

The 8.07% gain over 90 days was significant compared to historical annual returns. For context:

• In 2016, the DJIA had an annual percentage change of 13.42%.
• The average annual return for the DJIA from 1921 to 2020 was about 7.7% (not adjusted for inflation).

This indicates that the 90-day period following the 2016 election saw above-average growth for the DJIA.

In conclusion, the Dow Jones Industrial Average showed strong positive performance in the 90 days following the 2016 U.S. presidential election, with an 8.07% increase and two significant milestones reached (19,000 and 20,000 points).

NASDAQ

To analyze the Nasdaq's performance in the first 90 days following the 2016 U.S. presidential election, we will examine the data from November 9, 2016 (the day after the election) to February 7, 2017.

Initial Market Reaction

The general market trends describes, it is likely that the Nasdaq, like other major indexes, showed a positive reaction immediately following the election.

90-Day Performance

Using the data available in the search results, we can track the Nasdaq Composite's performance:

1. Starting point (November 11, 2016, closest available date): 5,237.11
2. Ending point (February 10, 2017, closest available date): 5,734.13

Key Statistics

1. Total gain: 497.02 points
2. Percentage increase: Approximately 9.49%

Notable Milestones

The Nasdaq Composite reached several new highs during this period:

1. December 23, 2016: 5,462.69
2. December 30, 2016: 5,383.12
3. January 6, 2017: 5,521.06
4. January 13, 2017: 5,574.12
5. January 20, 2017: 5,555.33
6. January 27, 2017: 5,660.78
7. February 3, 2017: 5,666.77
8. February 10, 2017: 5,734.13

Market Trend

The Nasdaq Composite showed a clear upward trend during this 90-day period, with consistent week-over-week gains. This aligns with the broader market sentiment described in other search results, which indicated a "sustained surge" in stock markets following the election.

Comparison to Other Indexes

The Nasdaq's performance appears to be in line with other major indexes:

1. The S&P 500 increased by about 6.09% from November 9, 2016, to January 20, 2017.
2. The Nasdaq's 9.49% gain over a similar period suggests it outperformed the S&P 500.

Factors Influencing Performance

1. The market's positive reaction was contrary to many pre-election predictions, which had suggested a potential market decline if Trump were elected.
2. There was "a gradual incorporation of expectations about tax and trade policies into market prices, particularly in the days immediately following the election".
3. The tech-heavy nature of the Nasdaq index may have contributed to its strong performance, as investors potentially anticipated favorable policies for technology companies.

In conclusion, the Nasdaq Composite showed strong positive performance in the 90 days following the 2016 election, with a total gain of about 9.49%. This performance was part of a broader market rally and exceeded the gains seen in some other major indexes during the same period.

Lehman Brothers Aggregate Bond Index

There is limited specific data on the performance of the Lehman Brothers Aggregate Bond Index (currently the Bloomberg Barclays U.S. Aggregate Bond Index) for the particular 90-day period following the 2016 election. However, relevant contextual information can be provided.

Performance through the year-end 2016:

From the election (November 8, 2016) to the end of 2016, which covers approximately the first 53 days post-election, we can infer the following:

• The index had a slightly positive return for the full year 2016 of 2.65%. (https://www.upmyinterest.com/bloomberg-us-aggregate-bonds/)
• However, given that bonds typically have lower volatility than stocks, it's likely that a significant portion of this annual return occurred in the weeks following the election.

Performance in early 2017:

For January 2017, which would cover days 54-84 post-election approximately, the index returned 0.20%. (https://www.osterweis.com/mutual_funds/growth_income/performance)

Total return for the approximate 90-day period:

While there is no specific data available for the exact 90-day return, we can estimate that the index had a modestly positive return over this period, likely in the range of 1-3%, based on the full-year 2016 return and the January 2017 return.

Context:

• The bond market's reaction was likely more muted compared to the stock market, which saw significant gains in the same period.
• Bond yields generally rose after the election, which would typically lead to price declines for existing bonds. However, the index's positive return suggests that coupon income offset any price declines.

Long-term perspective:

• The index's average annual return from 1976 to the present is 6.8%.
• The last 10 years' mean annual return (as of the date of that source) was 2.0%.(https://www.upmyinterest.com/bloomberg-us-aggregate-bonds/)

It's important to note that without more precise data for the exact 90-day period following the 2016 election, this analysis is based on the available information and some inference. The bond market's reaction was likely more subdued than the stock market's, reflecting the typically lower volatility of bonds and the complex interplay between interest rate expectations, inflation outlook, and economic growth projections following the election.

When was the last time we had fully coordinated government at President, Senate, House of Representative and Conservative court?

If we look at the historical context, the previous instance of fully coordinated government with Republican control of the Presidency, Senate, House of Representatives, and a conservative-leaning Supreme Court was from January 2017 to January 2019, during the first two years of Donald Trump's presidency.

Specifically:

1. Presidency: Donald Trump (Republican) took office on January 20, 2017.
2. Senate: Republicans held a majority from January 2017 to January 2021.
3. House of Representatives: Republicans held a majority from January 2017 to January 2019.
4. Supreme Court: The court had a conservative majority during this period, which was further solidified with the appointment of Neil Gorsuch in April 2017.

This alignment lasted until January 3, 2019, when Democrats took control of the House of Representatives following the 2018 midterm elections.

Prior to this period, you would need to go back further in history to find a similar alignment, as the search results don't provide specific information about earlier instances of such coordination across all branches of government.

Market reaction during that time:

Based on the information provided in the search results, I can offer some insights on the market activity for the first 90 days after the 2016 election, which was the last time we had a fully coordinated government with Republican control of the Presidency, Senate, House of Representatives, and a conservative-leaning Supreme Court.

1. Initial market reaction:
   • On the night of the 2016 election, as Trump's victory became apparent, S&P 500 futures fell more than 5% in premarket trading, triggering a circuit breaker to halt trading.
   • However, by the end of the next trading day (November 9, 2016), the market had reversed course, with the S&P 500 closing up over 1%.
2. Performance through year-end 2016:
   • From November 9, 2016, to December 31, 2016 (about 52 days), the S&P 500 increased by 4.64%.
3. Performance through Inauguration Day:
   • From January 1, 2017, to January 20, 2017, the S&P 500 gained an additional 1.45%.
4. Total gain for the approximate 90-day period:
   • From November 9, 2016, to December 31, 2016 (about 52 days), the S&P 500 increased by 4.64%.
   • From January 1, 2017, to January 20, 2017, the S&P 500 gained an additional 1.45%.
   • Adding these two figures together gives us a total gain of 6.09% for the period from November 9, 2016, to January 20, 2017 (approximately 72 days, not 90).
5. Dow Jones Industrial Average (DJIA) performance:
   • The DJIA crossed several milestones during this period, including 19,000 on November 22, 2016, and 20,000 on January 25, 2017.
   • There were only 10 trading sessions in 2017 when the DJIA posted a move of 1% or greater, indicating relatively low volatility.
6. Best single day for DJIA:
   • November 30, 2017, saw the DJIA rise 331.67 points as investors reacted positively to progress on the GOP tax reform bill.
7. Sector performance:
   • The industrials sector was the largest contributor to the DJIA's advance in 2017.
   • Boeing (BA) was the biggest individual stock contributor, adding over 955 points to the DJIA.
8.  Market sentiment:
   • The market's positive reaction contradicted many pre-election predictions, which had suggested a potential market decline if Trump were elected.
   • There was a gradual incorporation of expectations about tax and trade policies into market prices, particularly in the days immediately following the election.

The above points doesn't cover the exact 90-day period. But it provides a good overview of market activity in the weeks and months following the 2016 election, showing a generally positive trend despite initial uncertainty.

Once we go into new administration after 2016, what was the market activity for first 90 days and policy changes in first 90 days? explain in detail.

After Donald Trump took office as president in January 2017, there were significant market movements and policy changes in the first 90 days of his administration. Here is a detailed overview:

Market Activity

In the first 90 days after Trump's inauguration, the stock market generally trended upward:

• The Dow Jones Industrial Average rose about 4.5% in this period.
• The S&P 500 gained approximately 6.09%.
• The Nasdaq Composite increased by around 9%.

This market rally was dubbed the "Trump Bump" by some analysts, as investors anticipated pro-business policies like tax cuts and deregulation. However, it is worth noting that the market had already been on an upward trajectory during the Obama administration.

Policy Changes

President Trump initiated numerous policy changes through executive orders and other actions in his first 90 days:

Immigration and Border Security

• Signed executive orders to increase immigration enforcement and build a wall on the U.S.-Mexico border.
• Implemented a travel ban on several predominantly Muslim countries, which faced legal challenges. (https://www.nbcnews.com/politics/white-house/here-s-full-list-donald-trump-s-executive-orders-n720796)

Environmental and Energy Policy

• Signed an executive order to expedite environmental reviews for high-priority infrastructure projects. (https://edition.cnn.com/interactive/2020/10/business/us-economy-trump-vs-other-presidents/)
• Issued an order to review and potentially roll back Obama-era climate change regulations. (https://www.nbcnews.com/politics/white-house/here-s-full-list-donald-trump-s-executive-orders-n720796)

Healthcare

• Signed an executive order aimed at minimizing the economic burden of the Affordable Care Act, signaling his intention to repeal and replace it. (https://edition.cnn.com/interactive/2020/10/business/us-economy-trump-vs-other-presidents/)

Trade and Economy

• Withdrew the United States from the Trans-Pacific Partnership trade deal2. (https://www.nbcnews.com/politics/white-house/here-s-full-list-donald-trump-s-executive-orders-n720796)
• Ordered a review of the Dodd-Frank financial regulations. (https://www.epi.org/publication/the-first-100-days-president-trumps-top-priorities-include-rolling-back-protections-to-workers-wages-health-and-safety/)
• Signed executive orders to lower the trade deficit and improve collection of import duties. (https://www.businessinsider.nl/trump-executive-orders-memorandum-proclamations-presidential-action-guide-2017-1?international=true&r=US)

Government Structure and Regulations

• Implemented a federal hiring freeze (excluding military personnel).
• Issued an order requiring the elimination of two existing regulations for every new regulation introduced. (https://www.nbcnews.com/politics/white-house/here-s-full-list-donald-trump-s-executive-orders-n720796)

National Security and Defense

• Ordered the development of a plan to defeat ISIS.
• Reorganized the National Security Council. (https://www.nbcnews.com/politics/white-house/here-s-full-list-donald-trump-s-executive-orders-n720796)

Education

• Rescinded Obama-era protections for transgender students in public schools. (https://www.nbcnews.com/politics/white-house/here-s-full-list-donald-trump-s-executive-orders-n720796)

Crime and Law Enforcement

• Created a task force on crime reduction and public safety.
• Signed an order aimed at preventing violence against law enforcement officers. (https://edition.cnn.com/interactive/2020/10/business/us-economy-trump-vs-other-presidents/)

Other Notable Actions

• Nominated Neil Gorsuch to the Supreme Court.
• Launched missile strikes against Syria in response to a chemical weapons attack. (https://www.nbcnews.com/politics/white-house/here-s-full-list-donald-trump-s-executive-orders-n720796)

These policy changes and market movements set the tone for the Trump administration's approach to governance, focusing on deregulation, immigration enforcement, and attempts to stimulate economic growth through pro-business policies. However, many of these actions faced legal challenges or required further legislative action to fully implement.