2024 Post-Election Playbook
The verdict is in.
The GOP won across the board.
Here’s your 2024 post-election playbook.
Heading into the election, our data signaled volatility risk into and after the vote. This was based on historical studies grounded in data.
We now believe a less cautious stance is warranted. And 2 long-standing areas of focus for us are getting an upgrade: Small- and mid-cap equities.
Here’s why. What transpired on Tuesday took many by surprise. President elect Donald Trump decisively won. Even bigger is what’s happening in Congress.
Republicans control the Senate and it’s looking like they’ll be the House majority. Only time will tell on the latter.
Here’s the deal. What’s shaping up is bullish for equities medium and long-term. In fact, yesterday our data saw some of the most risk-on action ever!
And certain sectors are going to fly massively in the months ahead. I say that confidently because we’ve seen this behavior before.
The narrative has shifted overnight. Our long-held stance to buy small- and mid-cap stocks is only enhanced.
This is the election trade – owning smaller left-behind equities.
Let’s look over the evidence and understand why.
2024 Post-Election Playbook
Back in March, we said something controversial. We made the case of how small-caps will make all-time highs sooner than investors realize.
Yesterday saw the S&P Small Cap 600 rally to its highest close ever of 1511.13:
Throw in the fact that rate cuts benefit small equities when we avoid a recession, and you’re looking at a powerful 1-2 punch to go small in your portfolio.
Turns out there are more reasons to bet on small- and mid-caps…and it has to do with the election results.
Currently, odds are shaping up that a red wave is here. That’s when the GOP controls the White House and Congress.
Keep in mind, we don’t have the House final results. But if we are to have a sweep, it’s the best case political scenario for a Republican president.
Since 1945, when the GOP has controlled the White House, Senate, and House – the S&P 500 sports 12.9% annual gains:
This clearly is part of the reason why equities are behaving so well. Pro-growth policies are baked into the cake.
Cyclical areas of the market are booming. But there’s more. When you review what happened the last time we had a Trump victory in 2016, strong patterns emerge.
Below plots the 2016 post-election returns for 4 major equity benchmarks. If you’re bear-suited up, you may want to rethink that stance.
After Trump won the November vote in 2016, 1-month later saw the S&P Small Cap 600 and S&P Mid Cap 400 both each gain 17.8% and 12.1% respectively.
Both easily outperformed the NASDAQ and S&P 500. The favoritism for SMID caps lasted out to 3-months:
This folks, is the trade that’s in motion. You’re going to want to overweight small- and mid-caps through next year based on this information.
More importantly, our data confirms the ultra risk-on appetite for these areas too. Yesterday was one of the largest institutional buy footprints ever for 4 specific sectors.
If you are on the sidelines about signing up for MAPsignals, now is the time to join. The tides are shifting, and you’ll have access to 2 brand new post-election reports.
Let’s wrap up.
Here’s the bottom line: A GOP victory controlling Congress is the most bullish political scenario since 1945.
Add to it that Trump’s victory in 2016 saw massive outperformance in small- and mid-cap stocks soon after the vote.
This echoes the current setup we see today. In fact, yesterday was an ultra buy thrust day, favoring cyclical areas.
2025 is shaping up to be a big year for SMID caps. That’s the opportunity ahead.
But you can do better by knowing the select areas attracting monster institutional support.
Join MAPsignals today and later today you’ll receive 5 signal studies pointing to large gains in the months ahead…AND get access to yesterday’s 10-stock buy list of small and mid-caps.
Institutions are voting on new groups based on the election…
…you just need a MAP to see it!