Stock market surges, then plunges after midterm elections

You've been following the stock market at all the last couple of days. It has been an absolutely wild ride, man, oh, man. Yesterday, the stock market surged following Tuesday's midterms, but today, a massive correction. So very tumultuous right now as the stocks react to this blue surge that swept the nation. Jason Brown joins us now. Hi, Jason. Thanks for coming on the show. Hey, thanks for having me. Okay, as a market analyst, I mean, when you look at this, this. what do you see? What's the determination that you make? Yeah, so the first thing that I think about when I see a market down so big like this is, don't panic. I know that that's most people's first reaction, the market is down big. But when you look at a stock chart or when you look at what's going on with the S&P 500, we're pretty much, I have it on my other screen here, we're pretty much back down to the July lows. Which means we've been here before, it's not abnormal considering the big run up that we've had. And I think the market is just trying to digest what does this election mean? What does the current interest rates mean? There's a lot going on with data centers. And what does that mean for approval of data centers and things moving forward? And so the market is just trying to process this information. And when the market takes time to process, the market or investors and traders like to say, let me bring my money back home into my pocket, into my bank account. Till I figure out where I should deploy it next. And I think that's what you're seeing happen right now. Is this unusual to see following an election? It's not unusual to see typically during, you typically see a relief rally after an election, which we got yesterday. And that relief is just saying, now we have some certainty of who's going to have control of the House or the Senate. Is it going to be red or blue? Because the market doesn't like that uncertainty, they don't know where to invest or which policies they should be considering investing under. But the reversal after the relief rally is a little bit interesting It's interesting that that's happening today after the markets celebrated Having some certainty yesterday, but we just look at this as volatility. It's not abnormal though for the market to be volatile, meaning up big one day, down big the next day. It's about 15 minutes for the market closed, sometimes you'll even see it rebound in the same day and get bought back up as if nothing happened. So the market likes certainty and when we have an election and we have people elected that is certainty, that makes sense. When we saw yesterday, when we saw stock markets surging, we were seeing certain stocks do Stocks do really well, certain stocks go down, and it was telling. When you think about what is in the news right now, what is political right now, AI stocks were split. So we saw chip makers and data center operators, those stocks falling while cash rich AI heavy white weights rose. What was going on there? Well, you had a couple things all kind of playing out at the same time. You also had AMD, which announced some very stellar earnings yesterday as well, which gave a lift to the semiconductor sector and you saw a lot of chips rallying. But then also you had the election results come through where there's this thought that perhaps the Democratic Party won't be as kind to AI companies and tech and building data centers and etc. There's that push and pull if there's going to be a slowdown on data center approvals, then do we need as many chips or can they continue to sustain growth rate? And the answer is possibly no, you might see a slowdown. Then there's the question and what does that mean for earnings? What does that mean for the multiples that we were paying down? We were paying ahead for two, three years down the road, but now we have to reevaluate what we were paying for assuming we were going to get that type of multiple return. So you had Basically multiple events going on yesterday and so again that's what creates that volatility. You got a great earnings out of AMD you're like great this is good news for the chips and semiconductor sector. Wait the Democrats took the Senate in the house and they're not that excited about data center. So now what does that mean? The market is just trying to process all that I think what investors or people at home should be thinking about is you're not a day trader typically. And just understand you don't necessarily want to look at this and try to make decisions day to day on what's happening. Because next week we could rebound and give kind of pick back up where we left off at and be higher. And you'll be regretting that you sold out of everything on a random Thursday just because the market is down. So when you zoom out, I've said this before, Long-term, the market goes higher, no matter who has the House, who has the Senate, and pretty much regardless of who the president is, long-term, the market goes higher. So you want to make sure your investment thesis aligns with that if you're a long-term investor. And obviously, if you are a day trader or a short-term investor, you can have some fun right here, right now. But if that's not in your... Typical bag or expertise to try to jump in and jump out. I just wouldn't panic here. I would think about it like a grocery store. Some of your favorite stocks are on sale. I would start making a list of what companies would I have liked to own at this discounted price and start thinking about where the puck is going to be when these stocks start to come back. Whose side and what stocks you want to have in your portfolio? Good advice. What about the dollar? How was it performing against other currencies through all this? You know, I haven't really paid attention to the dollar itself and how it's performing. I don't think there's any news that Came out that would make the dollar go up or go down based on the election. I think the dollar right now is going to be more based on what's going on with not just the currency, but what's going on with interest rates. Can we get a better yield here in the US? Can we get a better yield if we go with our own treasury? Or can we get a better yield going outside of the country? But I haven't specifically looked at what's going on with the dollar, so I never want to talk to. I don't want to give too much insight on something I haven't researched, at least not before this segment. That's fair. Does the market tend to favor one party over the other? I mean, does it like Democrats? Does it like Republicans? Yeah, that's a really great question. And the answer is no. The market, the only party that the market likes is certainty. And so the market, you have to think about it like this, the market is made up of people who are investors. Well, these investors, Are going to get a return based on how leadership is running the company. Well, leadership doesn't know which direction it's going to go with the company until it knows what rules it has to play by. Mainly the tax rules, regulation rules, things like that. And so until leadership knows which game is playing, there's uncertainty until we get an election. Because if Republicans are in control, companies are going to Invest in according to those rules. If the Democrats are in control, companies are going to invest according to those rules. They just want to know what the rules are so they can know how to play by it. And so the market doesn't necessarily care which party is in office, it just wants to know what rules to play by. The other thing to think about is, The market also as well as investors are saying, where do I rotate money to? If this administration is not going to be kind to data centers, tech, if there's going to be a slowdown there, what are they excited about? Are they excited about healthcare, Medicare, Medicaid is which where you see some of the healthcare stocks started to move higher because The market is saying, maybe this is where the policy and the direction is going to go and going to be in favor to and going to get government subsidies, is going to get more money poured into. So you also saw a rally in health care stocks. So again, investors, the market, they don't really care who's in office and who's in control. They just want to know. What game to play and then what direction should the money rotate to so they can get a better return on their investments. All right, so for everybody at home who's been watching this tumultuous market, it goes up, it goes down, it goes up, it goes down in the last couple of days. Remain calm, don't do anything drastic. Don't look long term, the market goes higher and just like your favorite grocery store. This is a perfect time to start looking at some great companies at a discount. All right, Jason Brown with the Brown Report. So appreciate you coming on the show.