This week marked another U.S. presidential election, and we wanted to start with an interesting historical note. Donald Trump became the second president to win an election, lose a subsequent one as an incumbent, and then win again in a later election. The last time this happened was in 1892 with Grover Cleveland.
Similar to Grover Cleveland, Trump has won the Electoral College, the popular vote, and the Senate, and he may also secure the House in the coming weeks. This process could still take several weeks to finalize.
In terms of how Trump achieved such a large victory, the chart below outlines his support relative to his last election against Biden. Notable changes include increased support from minority voters across all categories and from people under the age of 65.
Donald Trump's success in this election was partly due to his effective use of long-form podcast interviews, marking a shift from legacy media such as CNN and Fox News. For instance, while Kamala Harris' CNN townhall had 3.3 million viewers, Trump's interview on Joe Rogan's podcast reportedly reached over 80 million, with additional millions tuning into smaller podcasts for in-depth policy discussions, contrasting with the brief sound bites typical of legacy media.
In the wake of Donald Trump's decisive victory in the 2024 U.S. presidential election, investors might wonder how this will impact their portfolios. As the United States, Canada's largest trading partner, embarks on another Trump presidency, the implications for the Canadian economy, trade policies, and investment strategies are significant.
On Monday, April 8, Mario Mota and Mark Wiesel from The Steele Group were joined by Greg Valliere, Chief U.S. Policy Strategist. During this call, based on market data, it appeared that Trump could win against Biden. We asked what this might mean for Canada. Greg had a harsher prediction, suggesting that due to the animosity between Trudeau and Trump, there might be negative repercussions coming north.
While this can be concerning, it's crucial to separate Canadian domestic events from public markets. For our investment portfolios, the most significant impact comes from U.S. markets which, since it became clear that a larger Trump victory was on the horizon, have reacted positively. At the time of posting this article, the markets were up by nearly 5% within the first two days of his victory.
Part of the reason for this positive market reaction is due to expectations that Trump will focus on tax cuts for both personal and corporate taxes, which historically have fueled increased consumer spending. Secondly, sectors like financials and energy benefit from the anticipation of regulatory cuts which supported their growth during Trump's first term.
Investors might understandably be apprehensive that the ups and downs of this election year could eventually affect the market. However, the emotional news-cycle rollercoaster of election years often has less impact on markets than voters might assume, and history shows the challenges of making investment decisions timed to an election year. Below charts the minimum, average, and maximum returns by year since 1950.
The most notable factors impacting the 4 year has been due to the Tech Bubble bursting in 2002 near the end of Clinton's administration followed by the 2008 financial crisis at the end of Bush's administration.
We remain dedicated to helping you achieve your financial goals. If you need assistance or have questions, please feel free to reach out to Cliff, Mario, Mark, or any member of The Steele Group team.