In the latest episode of CIO Perspectives, Sid Ahl and Erika Pagel from Brown Advisory discuss the impact of the recent U.S. elections on markets and policy. Joined by colleagues Eric Gordon and Alice Paik, they delve into the implications of a "red sweep" with Trump winning the presidency and Republicans gaining control of both the House and Senate. This political shift is expected to lead to pro-growth, pro-business policies, including potential corporate tax cuts and deregulation, which have already sparked significant market reactions.
Sid and Erika highlight the market's immediate positive response to the election results, noting the S&P 500's rise and the broadening of returns in various sectors. They also discuss broader economic implications, such as potential changes to corporate tax, tariffs, immigration, and energy policies, and concerns about the rising deficit and inflation. Eric Gordon adds that the positive market response is driven by relief over a definitive election outcome and the potential for pro-business policies. He warns, however, that the long-term sustainability of this rally depends on the actual implementation of these policies and how they affect inflation and interest rates. Alice Paik provides insights on the tax policy changes expected under the new administration, emphasizing the need for taxpayers to remain prepared for potential legislative shifts. Overall, the discussion underscores the market's cautious optimism while highlighting the uncertainties that lie ahead.
Disclosures:
The views and opinions expressed in this podcast are those of the speakers and do not necessarily reflect those of Brown Advisory. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. The information provided in this podcast is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only and is not individually tailored for or directed to any particular client or prospective client.
Alternative Investments may be available for Qualified Purchasers and/or Accredited Investors only.
The views expressed are solely for informational purposes and do not represent an endorsement of any political party or candidate.
“Magnificent Seven” (Apple, Microsoft, Alphabet, Amazon, Meta Platforms, Nvidia and Tesla)
Any business or tax discussion contained in this communication is not intended as a thorough, in-depth analysis of specific issues. Brown Advisory does not render legal or tax advice. Prior to making an investment decision, a prospective investor should consult with its own legal, tax, accounting and other advisors to determine the potential benefits, burdens, and other consequences of such investment.
The CBOE Volatility Index, or VIX, is an index created by CBOE Global Markets, which shows the market's expectation of 30-day volatility. The Cboe Companies, their third-party service or data providers, or any party from whom they have licensed trademarks or indices (collectively, the “Cboe Parties”) do not guarantee the accuracy, completeness, or timeliness of the Content, trademarks, strategies or values, or the methodologies or input data used to calculate index values.
The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. The index was developed with a base value of 140.00 as of December 31, 1986.The Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell ® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication.
The S&P 500® Index represents the large-cap segment of the U.S. equity markets and consists of approximately 500 leading companies in leading industries of the U.S. economy. Criteria evaluated include market capitalization, financial viability, liquidity, public float, sector representation and corporate structure. An index constituent must also be considered a U.S. company. S&P® and S&P500® are registered trademarks of Standard & Poor’s Financial Services LLC.
All data is sourced from FactSet unless otherwise stated. FactSet Research Systems Inc. (“FactSet”) FactSet is a registered trademark of FactSet Research Systems Inc.. All proprietary rights, including intellectual property rights, in the FactSet Data will remain property of FactSet
Sectors are based on the Global Industry Classification Standard (GICS) sector classification system. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of MSCI and Standard & Poor’s. “Global Industry Classification Standard (GICS), “GICS” and “GICS Direct” are service marks of Standard & Poor’s and MSCI . “GICS” is a trademark of MSCI and Standard & Poor’s.
Terms and Definitions:
Earnings per Share (EPS) is a measure of a company's profitability that indicates how much profit each outstanding share of common stock has earned.
Price-to-Earnings Ratio (P/E Ratio) measures a company's share price relative to its earnings per share (EPS).