U.S. equities climbed higher on Friday as Donald J. Trump was inaugurated as the 45th President of the United States. This marked the best Inauguration Day performance for a president since President Ronald Reagan’s second inauguration in 1985.
In the end, the Dow Jones Industrial Average gained 0.5%, the S&P 500 gained 0.3%, the Nasdaq Composite wafted up 0.3% and the Russell 2000 finished the day out with a 0.5% gain. Treasury bonds were mixed, the dollar was weaker, gold gained 0.3% and crude oil rallied rising 2.1%.
Materials stocks led the way with a 0.9% gain while healthcare names lagged, down 0.3%. In the semiconductor space, Skyworks Solutions Inc (NASDAQ:SWKS) gained 13% after reporting a quarterly earnings and revenue beat, strong guidance and announcing a new $500 million buyback program. Procter & Gamble Co (NYSE:PG) gained 3.3% on solid quarterly results driven by better-than-expected organic sales growth.
On the downside, Rite Aid Corporation (NYSE:RAD) fell 13.3% after Bloomberg reported possible antitrust issues with its proposed tie up with Walgreens Boots Alliance Inc (NASDAQ:WBA). And General Electric Company (NYSE:GE) fell 2.2% after reporting weaker-than-expected revenues — boosting the Feb $31 GE puts recommended to Edge Pro subscribers to a gain of nearly 50%.
Overall, the day’s gains capped a historic post-election period for the stock market with large-cap stocks up nearly 11% from their pre-election low. That ranks as the best Election Day to Inauguration Day move in the market, edging out the rallies enjoyed in the wake of the elections of Presidents William McKinley and Calvin Coolidge.
It also shrugged off a tendency for market weakness on Inauguration Day: According to the folks behind the Traders’ Almanac, stocks tend to fall as new presidents are sworn in two-thirds of the time.
Looking ahead, CFRA Research chief investment strategist Sam Stovall notes that starting with President Dwight D. Eisenhower’s inauguration in 1953, the S&P 500 has risen an average of 1.6% the first 100 days of a president’s first term.
Trump’s speech largely echoed campaign themes, with economic nationalism and populist feelings prominently featured. Pledges to increase infrastructure, military spending, and border security were all mentioned. And, in this digital era, the peaceful transition of power could be seen from the White House website to Wikipedia.
Looking ahead, as the political pomp quiets and traders and investors return to their normal work, the Q4 earnings season will continue to roll on ahead of a Federal Reserve policy meeting at the end of the month. According to FactSet data, analysts are looking for S&P 500 earnings to grow 3.2% from last year — which would mark the first back-to-back expansion in profitability since the beginning of 2015.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
