Jeffery Hirsch, Editor in Chief of Stock Trader’s Almanac, explains how Donald Trump's win could impact the market in 2025.
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00:00So you brought up the election. We saw a huge rally in the stock market the day after the results.
00:07Can you tell me what does history suggest could happen for the stock market over the next four
00:16years, given that we have, at least for now, a Republican White House, a Republican Senate,
00:22a Republican House? Lots to unpack there. Well, the reason the market popped so much
00:27right after the election was that the decision was quick and decisive, which we were all fearing
00:31that there was going to be some, you know, drawn out process like we've had, like we had in 2020
00:38and in 08, in 2000, I mean in 2000. So what history suggests is that we've got a Republican
00:46Congress, which is more important than the presidency, believe it or not. In the 25-moment
00:51accolades, all the political alignments, the best combination is Republican, excuse me, Democratic
00:55President, Republican Congress. Dow averages over 17%, but Republican Congresses alone, 13%
01:02Dow and S&P and like 15.6% with a Republican Congress for the Nasdaq. So that's just for the
01:08post-election year, okay? I mean, that's for all years. The post-election year itself, I mentioned
01:13earlier, 8% to 12%, and I'm concerned with that midterm year, which is where we see bear markets,
01:20recessions, and market declines in general happening. I'm looking for, you know, new highs.
01:27I think we can get upwards of, you know, down 60,000 by the end of the next four years.
01:35So, I mean, we hear sometimes that the market likes gridlock. Is that true historically?
01:42I think that's wrong. It's not gridlock per se. The combination of a conservative,
01:49fiscally conservative body controlling the purse strings in Congress and a progressive, more, you
01:54know, nuanced thinking in a Democratic President seems to be the best combination, or has been the
02:00best combination. We're still a little gridlock in the House. They don't have much of a margin there.
02:04I think the conservative wing there is going to keep things in check. So it's really Republican
02:09Congresses that are most important for the bull market. Now talk to me about Trump's policies.
02:14He is very verbal, very vocal about tariffs, right? So what are the likely impacts
02:23on the stock market from a tariff plan? I mean, if he goes all out with everything,
02:29it would be expensive. I don't foresee him doing that. It's a negotiation tactic. He's
02:34the art of the deal guy. He wants to get people to the table. Some tariffs have been effective
02:40historically. I think Mr. Trump has a legacy that he wants to keep up. He doesn't have to
02:50run for re-election. I think he's going to do everything in his power to preside over economic
02:54growth, a bull market, and global stability. And if he just goes willy-nilly and puts tariffs on
03:00everybody out there, it's not going to achieve that. So it's going to be tactical.