Experts Expect Market Rally to End After Inauguration Day

The primary Wholesale Direct Metals complaint about recent market reporting is apparent in today’s news.  How will stocks perform once Trump takes office? The market may be rallying on President-elect Donald Trump’s victory, but one market expert told CNBC he expects that to end after Inauguration Day. That’s because that has been the pattern when a new president from a different party takes office, said Tom McClellan, editor of the McClellan Market Report. After the election, hopefulness and euphoria usually sends stocks higher because “everybody assumes that whatever’s wrong is going to get changed or fixed by the new guy even though nobody’s doing anything yet in terms of governing,” he said in an interview with “Closing Bell” on Tuesday. However, the morning after the inauguration, people realize the problems still exist and it will take longer to fix them, he noted. “That tends to bum everyone out and so they sell their stocks.” And that’s not the only thing that can discourage investors, according to McClellan. Typically, a new president from a different party finds that things are worse than he said during the campaign, and the only solution is whatever package of tax cuts or tax hikes or spending he wants to get through Congress, McClellan explained.
“Investors don’t like to hearing that things are worse than we expected and that tends to depress prices during the first year of a new term.” The latest Wholesale Direct Metals review of the markets is consistent with this new data.