LIVE MARKETS-Post-election honeymoon is over, but that doesn't mean there still won't be some romance

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POST-ELECTION HONEYMOON IS OVER, BUT THAT DOESN'T MEAN THERE STILL WON'T BE SOME ROMANCE

Sam Stovall, chief investment strategist at CFRA, is noting that the post-election honeymoon period (PEHP) from election day until inauguration day has come to an end.

During this time, the S&P 500 index .SPX gained nearly 4%, which he says outpaced the average 1.6% price gain for all years since 1944, and is ranked 11th out of the 21 PEHPs since Franklin D. Roosevelt (FDR) was elected for the fourth time.

According to Stovall, the highest PEHP return was the late-pandemic surge of 14.3% after President Biden was elected in 2020, while the worst return occurred after President Obama’s election in 2008 as the S&P 500 collapsed 19.9% during the final throes of the 2007-2009 financial crisis.

"Investors now wonder if this year’s PEHP climb will indicate another positive performance for both the First 100 Days and Full Year, as it has for each of these two periods nearly 80% of the time," writes Stovall in a research note.

Stovall adds that the top four S&P 500 sectors during the PEHP went on to outpace the benchmark index during the remainder of the year three out of every four times since 1993.

During the most recent PEHP, he says consumer discretionary .SPLRCD, communication services .SPLRCL, financials .SPSY and energy .SPNY were the top performing S&P 500 sectors.

Although he cautions "history is a great guide but it’s never gospel," Stovall's says that "Despite the forecast for an increase in volatility, CFRA continues to predict another price increase for the S&P 500 in 2025 and maintains its overweight rankings in the communication services, financials, and information technology sectors."

(Terence Gabriel)

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