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A guide to what the 2024 US election means for Washington and the world.
Donald Trump’s election victory last month spurred a rally in U.S. stocks on hopes of sweeping policy changes, sparking a trading frenzy at brokerages and Wall Street banks.
According to exchange operator Cboe Global Markets, U.S. stock trading volume rose 38% in November compared to the same month in 2023, reaching a level not seen since the meme stock boom in early 2021, and this month remains above the annual average. exceeds. .
The shock wave of trading activity has not only affected large institutional investors such as JPMorgan Chase & Co. and Citigroup Inc., but also brokerages favored by retail clients such as Interactive Brokers and Robinhood. The move comes as investors rushed into U.S. stocks after the Nov. 5 election on hopes that Trump would take a more pro-business approach.
A strong year for U.S. markets also boosted trading activity more broadly, with Wall Street’s S&P 500 index up 27% year-to-date and hitting a series of record highs.
Investor interest in the market has been at an “unbelievable level” in recent months, and “that’s reflected in trading activity,” Charles Schwab’s CEO said in January. Rick Wurster, who will take up the position, told Financial. times.
“I don’t think changing the calendar to 2025 will change the situation,” he added.
The increase in activity is also benefiting Wall Street’s biggest banks.
JPMorgan Chase & Co.’s trading revenue is on a “slightly better” trajectory for the final three months of 2024, up 15% from a year ago, including the weeks before and after the November election, said Marian Lake, head of retail banking. He said this at Goldman Sachs’ earnings conference this week. Service conference.
That’s more than triple the 5% increase analysts had expected before Trump’s victory, according to Bloomberg data.
Regarding the potential impact of the Trump administration on markets and the economy, Lake said, “There will likely be meaningful policy changes,” and she shares the market’s broader optimism about the president-elect. he added. “There is likely to be some sort of pro-growth agenda,” she says.
Citigroup said this week that it expects trading revenue to rise as much as 19% in the fourth quarter compared to the same period last year.
©Timothy A. Clary/AFP/Getty Images
Similarly, Robinhood, a brokerage popular among young traders, announced this month that its stock trading volume increased by 16% from October to November, and its crypto trading volume soared by more than 500%. Interactive Brokers said activity, tracked by daily average revenue trading, increased 17% on a like-for-like basis.
Stocks of Schwab and rival Interactive Brokers have risen 31% and 47%, respectively, over the past three months, outpacing the 10% rise in the S&P 500 as a whole. Online brokerage firm Robinhood’s stock has nearly doubled, boosted by its booming cryptocurrency business.
Steve Kirk, Robinhood’s chief securities officer, said trading volume on his platform “exploded” on election night.
“We’re starting to see a lot of volume in the crypto space,” he told attendees at the company’s investor conference last week, adding that stocks of companies like Tesla “just went up in terms of volume and price.” “It’s just that,” he added.
“People want to trade when there’s volatility, so certainly the new administration likes volatility and we’re going to see more volatility going forward,” said Steve Saunders, head of product development at Interactive Brokers. he said. [it]”.
Patrick Morley, senior research analyst at Piper Sandler, said that expected rate cuts from the Federal Reserve and a “more relaxed” regulatory environment under the Trump administration “will lead to increased volume over the next year. I will,” he added.
