I was interviewed on Wharton Business Radio on the election and the stock market on November 2.
Wharton finance professor Joao Gomes, University of Maryland professor David Kass and Johns Hopkins University’s director of European and Eurasian Studies, Erik Jones, discussed the likely effects of the upcoming election on capital markets on the Knowledge@Wharton show, on Wharton Business Radio on SiriusXM channel 111
The market is more comfortable with Clinton; there is a lot more uncertainty associated with Trump election.” –David Kass
“If Clinton is elected, Kass expects a “relief rally of a few percentage points” on the Dow Jones and the S&P indices, assuming there are no post-election problems. He thinks the markets are “fully valued and not overvalued – there is still room for growth.”
“Kass expects the Federal Reserve to start raising interest rates at its December meeting “and perhaps begin an upward movement in that regard, and that would assist the financial sector.” He notes that the financial futures markets are indicating an over 80% probability of a rate increase.”
“Concerns over health care reform have mounted over the past year with many insurance companies wanting to exit certain markets, reducing choice for consumers and increasing premiums. “The problem needs to be fixed and it is fixable,” says Kass, adding that a Clinton administration and a likely Democratic-controlled Senate could make that happen. However, Clinton’s “aggressive stand” on pricing of drugs following media reports on alleged abuses could hurt pharmaceutical company stocks, he adds.”