Company Stock Reacts to the 2016 Election Shock: Trump, Taxes and Trade
نویسندگان
چکیده
Donald Trump’s election was a significant surprise. The reaction of company stock prices to the election reflects shifts in investor expectations about economic growth, taxes, and trade policy. High-beta stocks outperformed, presumably due to strengthened growth expectations. Expectations of significant corporate tax cuts boosted high-tax firms, but hurt firms with significant net operating loss carryforward balances. Investors currently perceive the climate to be more favorable for domestically-oriented companies than those with substantial foreign involvement. Markets incorporated expectations on growth and tax policy into stock prices relatively quickly; they took more time to digest the consequences of shifts in trade policy. JEL Classification: G12, G14, H25, O24
منابع مشابه
Company Stock Reactions to the 2016 Election Shock : Trump , Taxes and Trade
Donald Trump’s election was a significant surprise. The reaction of company stock prices to the election reflects shifts in investor expectations about economic growth, taxes, and trade policy. High-beta stocks outperformed, presumably due to strengthened growth expectations. Expectations of significant corporate tax cuts boosted high-tax firms, but hurt firms with significant net operating los...
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