Market Week in Review

Now what? U.S. elections and possible investor opportunities

In this week’s video update:

  • So far, most markets up around the world after the U.S. election
  • Digging into the cause of the rally: Election results vs. market fundamentals
  • Up, down or indifferent: What’s happening with emerging markets?

On this week’s update, Bindu Sutaria, director, investments, interviews Chief Investment Strategist Erik Ristuben. They dissect the market responses to the U.S. presidential election and look forward at what may be coming next for investors.

A fundamental focus on fundamentals

With Donald Trump declared the winner of the U.S. Presidential race, Ristuben laid out the market reactions around the world. After an immediate dip, where S&P 500® futures contracts limited out at 5% down, markets bounced back soon after. Ristuben stated that, at the time of this broadcast, both the S&P 500® Index and the European Stoxx 600® Index were each up about 3%, and with a few marked exceptions, markets around the world were up. Ristuben contextualized these data points by comparing the numbers to October market highs. The S&P 500 Index, Ristuben recalled, is now less than 1% above that October peak.

Russell Investments’ strategists believe the positive market response had more to do with market fundamentals than with the winning candidate, and Ristuben pointed to a solid corporate earnings season and continued economic growth in the U.S. and Europe.

Another result on the positive side was the bond market. The 10-year U.S. Treasury yield rose by 37 basis points this week. Ristuben attributed that rise to Trump’s proposals for tax cuts and infrastructure spending.

One clear exception to the good news was emerging markets. Ristuben stated that the Russell Emerging Markets Index is down about 3% for the week.

Finally, Ristuben closed out the broadcast by confirming that a December interest rate hike by the U.S. Federal Reserve still seems likely. Watch the video now.

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