Smith Brain Trust Forecasts Election’s Impending Market Effects
The Smith Brain Trust—a collection of marketing, finance and accounting thought leaders at the Robert H. Smith School of Business—are forecasting how the market will reach to the results of the 2016 presidential election.
According to Smith finance professor David Kass, there are a number of examples of how the 2016 U.S. presidential election would move market sectors, such as Clinton’s efforts to revamp the Affordable Healthcare Act the Federal Reserve’s announcement that it would increase interest rates in December; a move that would assist the banking sector.
Kass recently joined SiriusXM Business Radio’s “Knowledge@Wharton” show (listen here) to discuss a range of election effects with economists from The University of Pennsylvania and Johns Hopkins University.
On The Federal Reserve’s Timing:
According to Kass, the Federal Open Market Committee would not want to influence the election outcome, but it wants any market reactions to the election out of the way. Therefore the scheduled Dec. 13-14 Federal Reserve meeting after the election would make a more appropriate time for the fed to act.
“Financial futures markets are indicating an over-80 percent probability of a December rate increase,” Kass says.
On Health Care Proactivity:
According to Kass, “[Clinton is] very knowledgeable in this area, and working with Congress, she will come up with a fix or improvement to Obamacare,” also citing Clinton’s experience reforming health care as First Lady.
Kass believes that pharmaceutical companies and stocks could be Clinton’s crosshairs, saying “The Clinton campaign has taken a very aggressive position against pricing of pharmaceutical drugs. There have been some abuses that have made the media in the past year. And there may be some effort made the in the direction of putting pressure on pharmaceutical companies to either lower prices or reduce price increases in the future.”
On Wall Street:
According to Kass, if Clinton wins uncontested, there would be a “relief rally” on Wall Street. “The market right now, though it’s fully valued, is not overvalued,” he says. “There’s still room for growth.”
About the Author
Max Pulcini
Max Pulcini is a Philadelphia-based writer and reporter. He has an affinity for Philly sports teams, Super Smash Bros. and cured meats and cheeses. Max has written for Philadelphia-based publications such as Spirit News, Philadelphia City Paper, and Billy Penn, as well as national news outlets like The Daily Beast.
