The US election outcome
Fund managers’ views
Many billionaire investors and fund managers believe Donald Trump’s win is good for the economy. Carl Icahn, a billionaire hedge fund manager and chair of Icahn Enterprises, said that under a Trump presidency, the US economy (IWM) (IWF) will grow at a faster rate and the economy (VOO) (IVV) will see a stronger business climate.
Bill Ackman, CEO of Pershing Square Capital Management, also has the same stance and said he was extremely bullish on Trump.
How major indexes performed in the last one month
Major indexes of the United States (QQQ) (IVV) showed positive movement after the announcement of the US presidential election outcome, and this rally has continued throughout the last one month. The S&P 500 Index (SPY), the Nasdaq Composite Index, and the Dow Jones Industrial Average Index (DIA) rose nearly 6%, 5.8%, and 7.8%, respectively, between November 9 and December 9, 2016.
The market rally has mainly been driven by optimism about the US economy. The optimism is bringing investment into riskier US assets such as equities and the dollar index (UUP). Trump’s economic policies aim to boost jobs by removing regulations on certain sectors, imposing trade barriers, reducing the tax rate, and stimulating growth through fiscal stimulus. These factors could lead to growth in the US economy (SPY) (SPXL). Various US indicators are also improving, adding to the optimism.
In the next part of this series, we’ll analyze how various global indexes have performed in the last one month.