It has now been 100 days since President Trump was elected last November and contrasting the headlines and appearance of turmoil in Washington, US equities have seen one of the steadiest and strongest rallies for a newly elected President on record. Since Election Day last November, the S&P 500 tracking ETF (SPY) is up just under 10%, but what is really interesting about the rally is where the gains have taken place. The chart below breaks down the returns of SPY between market hours (9:30 AM to 4:00 PM) and overnight returns (4:00 PM through the 9:30 opening bell). Often, when you see a big market rally, a lot of the gains come from ‘gaps’ where overnight news or events cause the market to open significantly higher, and unless you were long overnight, you miss out on the move.
What is notable about the rally since the election is that the majority of the gains have come during market hours. As shown in the chart, the cumulative gain of SPY during market hours since Election Day has been a gain of 6.74%. In other words, if you bought at the open and sold at the close every day, you would be up 6.74% and eliminated any possible risk of holding equities overnight. Conversely, if you bought at the close and sold at the open every day since the election, your cumulative gain would be 2.7%, which is less than half of the gain from being long during the trading day. In addition to being one of the strongest and steadiest rallies following the election of a newly elected president, the rally of the last 100 days has also been one of the most accessible too!