By Melinda Clark & Dr. Dilrukshi Hewage
02 December 2024
“Remember Remember the fifth of November” so goes the beginning of an old English poem celebrating the failed gunpowder plot against British Parliament in the 1600’s. (English Heritage, 2024) The same date is of political meaning in the states as well, as the date marks the 2024 United States Presidential Elections. Donald Trump, Republican candidate and former 45th President of the United States was up against Democrat and former vice president of Bidens presidency, Kamala Harris. For those who invest their hard-earned income in the American economy and worldwide, the outcome would be vital information.
Many celebrities jumped to show their support after Biden announced he wouldn’t be looking to do a 2nd term as president, and Kamala would come forward. Beyonce spoke at Haris’ Houston rally while rapper Cardi B appeared at Kamala’s rally in Milwaukee, both stressing the importance of women’s rights moving forward. Taylor Swift took to Instagram after the democratic convention to state her vote would be for Kamala. (Yang M, 2024)
(ITV News, 2024)
Tesla CEO Elon Musk is in infamous devotee of the Donald trump campaign. Having attended several rallies and using his digital platform, X, previously known as Twitter, to show his support. Rapper Kanye has said its “Trump all day”. American wrestling icon Hulk Hogan has said about the states, “we’ve never had it better than the Trump years”. (Yang M, 2024)
The three top financial contributors for the republican party were American Airlines, Walmart and Boeing, while on the democrat’s side were Google, Microsoft, and Brown and Brown. (Economic Times, 2024) Over a million dollars were donated by Google to the Harris campaign, and she received just over 2.5 million dollars with her top 3 investors. Trumps top three investors yielded him just over 300k, with American Airlines coming in the highest of the three at $134,000 contributed. (Economic Times, 2024) The Stock market proves its relevancy for investors time and time again, an easy asset to liquidate, it has performed better than any other security, including gold. (Cagan M, 2024) Looking at weekly company data from October 2024 to November 2024, we can get a snapshot at investment returns during pre- and post-election.
Five out of the seven companies measured had higher average weekly returns in November post-election. Tesla’s average return percentage nearly doubled from 4% to 8% in November following Trumps victory compared to the previous month while Republican backing Walmart saw a 212% increase on average market return. On the contrary, Trump’s top contributor, American Airlines faces post-election dip despite political support while Harris’s top contributor of Microsoft saw a 300% rise of weekly return. This suggests that investor sentiment toward the American Airline and Microsoft was influenced more by company-specific aspects or industry challenges rather than the election outcome. Overall, representing the American market, the New York Stock Exchange market shows a remarkable turnaround from negative return in October to positive return following the U.S. election.
By using standard deviation of returns to measure risk, as smart investors we equip ourselves with the knowledge of investment volatility. More risk more return reins true as top average return Tesla’s risk was the highest out of these tested companies coming in at 11%. The New York Stock Exchange risk landed the lowest at just 2%. All other companies measured risks varied between 2-4%.
With a risk under 2% and high yielding average weekly returns, an investment in the New York Stock Exchange composite is a no brainer, it’s range of investments mitigating the risks. Brown and Brown would have been a good share for the savvy investor to cash in on in November as they saw a high average increase in returns and had relatively low risk at just 3%.
Sometimes, the political landscape drives the market as it influences the smart investor keeps an eye on worldly matters. Overall markets tend to decline during election season given the uncertainty in the air, but times are ever evolving (Cagan M , 2024). When it comes to investing, staying informed about how elections impact market returns are a smart move for everyday investors. By keeping an eye on these market sentiments, we might just edge our bank accounts a little closer to those of the wealthy elite—one wise decision at a time!
References
Cagan, M., 2024. Stock Market 101: From Bull and Bear Markets to Dividends, Shares, and Margins—Your Essential Guide to the Stock Market. Simon and Schuster.
English Heritage (2024) Why Do We Remember the Fifth of November? Available at:
https://www.english-heritage.org.uk/members-area/kids/kids-the-stuarts/bonfire-night/ (Accessed: 26/11/24)
Economic Times (2024). US Presidential Election 2024: Donald Trump’s donor list in 2020 vs. 2024; and who’s donated how much to Biden and Harris. Available at:
https://economictimes.indiatimes.com/news/international/global-trends/us-presidential-election-2024-donald-trumps-donor-list-in-2020-vs-2024-and-whos-donated-how-much-to-biden-and-harris/articleshow/114957124.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
(Accessed: 26/11/24)
Investing (2024). American Airlines. Available at: https://www.investing.com/equities/american-airlines-group-historical-data (Accessed: 26/11/24)
Investing (2024). Walmart. Available at: https://www.investing.com/equities/wal-mart-stores-historical-data (Accessed: 26/11/24)
Investing (2024). Boeing. Available at: https://www.investing.com/equities/boeing-co-historical-data (Accessed: 26/11/24)
Investing (2024). Google. Available at: https://www.investing.com/equities/google-inc-historical-data (Accessed: 26/11/24)
Investing (2024). Microsoft. Available at: https://www.investing.com/equities/microsoft-corp-historical-data (Accessed: 26/11/24)
Investing (2024). Brown and Brown. Available at: https://www.investing.com/equities/brown—brown-inc-historical-data (Accessed: 26/11/24)
Investing (2024). Tesla. Available at: https://www.investing.com/equities/tesla-motors-historical-data Accessed: 26/11/24)
Investing (2024). NYSE. Available at: https://www.investing.com/indices/nyse-composite-historical-data (Accessed: 26/11/24)
ITV News (2024) From Beyonce to Elon Musk: Who are the celebrities backing each presidential hopeful? Available at: https://www.itv.com/watch/news/from-beyonce-to-elon-musk-who-are-the-celebrities-backing-each-presidential-hopeful/vfqh2xp (Accessed: 26/11/24)
Yang, M. (2024) Which Celebrities Have endorsed Kamala Harris and Donald Trump?Here are the biggest names. Available at: https://www.theguardian.com/us-news/2024/nov/03/celebrity-endorsements-harris-trump (Accessed: 26/11/24)