ZeroHedge:
Consider the media headlines and stories published before and after the presidential election.
Before the election:
◦“The conventional wisdom is that, right off the bat, the stock market would fall precipitous-ly. Simon Johnson, the Massachusetts Institute of Technology economist, posited that Mr. Trump’s presidency would “likely cause the stock market to crash and plunge the world into recession.” He predicted that Mr. Trump’s “anti-trade policies would cause a sharp slowdown, much like the British are experiencing” after their vote to exit the European Union.” - The New York Times – “What Happens to the Markets if Donald Trump Wins?” by Andrew Ross Sorkin
◦“The stock market doesn’t like the idea of a Trump Presidency”- PBS Newshour
◦“Economists: A Trump win would tank the market” – Politico
◦“Stock Markets will freak out if Trump wins, but you probably shouldn’t”- Boston Globe
After:
◦Wall Street welcomes Trump with a bang” –CNN Money
◦Stock Market Slingshots Higher After Trump Victory Sparked Overnight Plunge” Forbes
◦Dow Surges to Fresh All-Time High on Trump-Fueled Momentum” –Fox BusinessFollowing Donald Trump’s surprise victory and the violent market reactions, many investors are left scratching their heads. As shown above, the consensus narrative warned that a Trump victory would spell doom for the markets. Days later, the narrative flipped and Trump’s economic policies, all of which were known prior to the election, are deemed beneficial for share prices.
In this article we evaluate the narratives we see day-to-day and how they not only tell a story, true or false, but provide comfort and, importantly, a sense of control. We then explore the current mar-ket narrative calling Trump’s victory bullish for share prices. We hope to provide cognizance of the influence of narratives and to offer a basis to help investors judge whether the markets’ reaction is justified.
http://www.zerohedge.com/news/2016-11-29/narrative-every-season-stocks-and-after...