Key Takeaways from the Election

Market Updates

Key Takeaways from the Election

Nick Lacy, Chief Portfolio Strategist, weighs in on the presidential election results.

November 9, 2016

"Five letters here just for everybody out there in Packer-land:
R-E-L-A-X." – Aaron Rodgers, Quarterback, Green Bay Packers

Consensus will likely tell you that it was the yearning for significant change that pushed President-elect Trump over the finish line on Tuesday. And the results reflect that desire for change – this is the first time I have been able to find a candidate who won the U.S. presidency without experience as either a military General or a public official. This shows a popular movement away from the “normal” makeup on Capitol Hill.

The truth of the matter is this: nothing is likely to change for quite some time. Implementation of policy change is a long and winding road full of hurdles to overcome so it’s vital to “r-e-l-a-x” and let the dust settle. We need to see what his political agenda is going to look like (most likely centered on health care, trade and immigration) as well as who he appoints to office. President-elect Trump will have the power to nominate the next Supreme Court Justice, which may have a relatively large potential impact as the court seems split today on strict versus loose construction, or conservative versus liberal interpretations. At that point in time, any long-term implications of this presidency will begin coming to fruition.

One advantage that Donald Trump has is that both houses of Congress are still controlled by the Republicans, although the Senate is by a small margin. Control of two of the three branches of government will likely be one of the most important dynamics of this election cycle by potentially providing a more favorable backdrop for collaboration and progress. Still, without the Republicans having a super majority, the minority Democrat blockages may still be very powerful.

There is a long history of transition of power in the U.S., and very seldom is there an impact on the economy and the capital markets that can still be felt years down the road. We will continue to monitor Mr. Trump’s agenda, measure the impact on the markets, and keep our advisors and clients informed as his term unfolds.

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