Regardless of your political affiliation, Wednesday was a tough day for markets. Typically the day-to-day changes in the market are not necessarily a concern to the long-term investor. However, there were some interesting developments yesterday. The following chart, which was published before the election, predicted reactions of some industries based on the victory of each respective party:

These have been widely-held views on Wall Street for some time now.  So how did they respond? Equity markets are a discounting mechanism, and that couldn’t have been more evident than it was Wednesday. 


Keep in mind, the S&P 500 was down over 2 percent Wednesday, so although health care services were down about 1 percent, that performance was about 3 percent better than the performance of Managed Care.

I personally believe yesterday was simply the market ‘squaring away’ positions to adjust to the new (old) administration. The election finally ended, and the market quickly looked forward to the fiscal cliff. While Wednesday’s decline was large, it wasn’t a “sky is falling” day. Volumes were low; many of the large moves in sectors (i.e. financials) were driven by only a few big players. Hopefully now we are “re-adjusted” and can hear some good news out of congress and get this capital expenditure/hiring boom party started…

Read more of our election commentary in our Weekly Market Review.

Content provided by guest writer Grant Engelbart, CLS Research Analyst