Sell, Resell: The Unexpected Election of Donald Trump in 2016 and the Behavior of the New York Stock Exchange
Måns Mattsson & Stefan Höller, 22. November 2024 - In this research paper, we utilize the unexpected victory of Trump in the 2016 American election to investigate the behavior of the New York Stock Exchange. The unexpected nature of the event provides an interesting research opportunity on political events and their influence on stock market behavior. How did the New York Stock Exchange (NYSE) react to the unexpected election of Donald J. Trump in 2016? We expect that the surprising victory immediately altered the stock exchange’s trajectory. Our main hypothesis is that on average, the daily high of the NYSE significantly differs in the periods before and after the event of Trump’s unexpected victory. Causal Effect and Assumptions We formalize the expected causal relationship in the “possible outcomes” framework. Our dependent variable is the daily high of the NYSE for each day from October until December of 2016. Our binary treatment variable is whether the trading day in qu...