By Irene Aldridge “The Trump effect” has captured news headlines. The unprecedented rise in the U.S. stock markets following the November 8, 2016, election has taken many investors by surprise. Some portfolio managers and commentators question how long it will last. Others proclaim it a bubble that has just hit a natural ceiling for stock prices. Still others call it a “suckers’ rally”, a stock rally with little fundamental information to back up the price movements. Even the legendary Carl Icahn himself proclaimed on December 10, 2016, that “The Trump rally in stocks may have gone too far” (http://www.businessinsider.com/carl-icahn-trump-rally-2016-12). Of course, the market has reached
An Analysis of Institutional Activity in October 2016 Adapted from Real-Time Risk: What Investors Should Know About FinTech, High-Frequency Trading and Flash Crashes (forthcoming, Wiley, NJ). Pre-order on Amazon.com. “Money talks, bull*%$# walks”, says a classic Wall Street proverb. The expression has a lot of merit: nothing reflects one’s beliefs more than a financial bet on the markets. The larger is the bet, the stronger is the belief. AbleMarkets research indicates that institutional money sold off when negative news affected Donald Trump in October 2016, but when Hillary Clinton’s negative news emerged later in the same month, there was very little reaction from institutional money.