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Sell The Inauguration?

During election night when the markets began to realize that Donald Trump would win the electoral college S&P 500 futures began to tank. The market was down nearly 5% late into after hours trading, but all of a sudden things started to turn around. A new surge of buying began during and after Donald Trump’s victory speech. Perhaps it was his reassuring and more formal tone that gave investors confidence in the market. The speech seems to be an arbitrary pivot point given the longer run implications of his presidency, but whether coincidence or not the speech represented an inflection point in the market.

The precedent is now set for markets to drastically switch directions based on the content of Donald Trump’s speech. It is possible that the inaugural address could have the inverse effect of the election night speech. If the inaugural address is not well received and does not replicate the same professionalism and formalism of the election night speech, we could see markets move sharply downward.


It almost seems like a conspiracy theory, that a speech could provoke such maniacal movements in the market, but it has in fact happened.Though nothing drastic was said in the speech, the markets saw a drastic move. I believe that the inauguration possesses much more market risk than the election itself, augmented by the fact that investors may think the worst is over. The harshest corrections are those that nobody sees coming and with the recent run up in the market, people may be getting too comfortable with the rally.

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