LPL Research Market Signals Podcast

What Happens If Trump Wins?

LPL Research

August delivered an uncharacteristically strong performance, but it’s followed by September, a historically weak month. In Part 2 of our two-part election preview series, we focus on what a potential second term for President Donald Trump could mean for stocks and the economy.

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The stock market continues to soar, while the economic data impresses as well. This week in the LPL Market Signals podcast, LPL strategists discuss the amazing August and look ahead to a busy September. Plus, they consider what a potential second term for President Donald Trump could mean for stocks and the economy.

What an August!

Stocks are delivering their best August performance since the mid 1980s, with many new highs along the way. The approximately 6% gain for the S&P 500 Index in August followed the 5% bounce in July. This takes us to the doorstep of what’s traditionally been the worst performing month of the year, as September historically has been quite weak. As the LPL strategists note, however, during an election year October has been the worst month of the year—suggesting jitters before an election are normal. With a nearly 60% rally from the March lows, some type of pre-election weakness would be perfectly normal.

What happens if President Trump wins?

Last week LPL strategists examined what would happen if former Vice President Joe Biden won the election, and this week they focus on a second term for President Trump. Unlike with Biden, we know what to expect from a Trump administration. No new higher taxes, less regulation, and continued tough negotiations with China all are quite likely. The strategists also note that a strong three months in the S&P 500 before an election historically has turned out well for the incumbent party. Given the strength of stocks recently, this may bode well for Trump, suggesting polls may be much tighter than what is being shared. On the other hand, a recession occurring before an election has ended hopes for previous presidents, and that could tell a much different story than the stock market.

Happy birthday, Warren Buffett

In honor of Warren Buffett’s ninetieth birthday, the LPL strategists recall what they’ve learned from this investing icon over the years and share some of their favorite quotes.

Chart - September is Historically Weak

Tune in now

Listen to the entire podcast to get the LPL strategists’ views and insights on current market trends in the US and global economies. To listen to previous podcasts go to Market Signals podcast. You can subscribe to Market Signals on iTunesGoogle Play, or Spotify.

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IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth in the podcast may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. All indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index data is from FactSet.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC. 

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