The losses of October extended to the first week of November, with investors continuing to unload equities ahead of the U.S. presidential election. After the surprise of a Trump victory settled in, markets sharply changed course, with equities rallying through the month on the prospect of a pro-growth/business administration. Domestic stocks rose sharply, especially small caps and cyclical sectors (energy, industrials), while international equities suffered due to the overhang of an Italian banking crisis as well as the specter of trade wars with the U.S. Bonds experienced losses as growth/inflation forecasts picked up in conjunction with a Federal Reserve that appears more likely to raise interest rates in its December meeting.

 
 
On January 20, 2017, Donald J. Trump will be sworn in as the 45th president of the United States. Between now and then, attention should largely focus on efforts to facilitate an orderly transfer of power, but there will be no shortage of conjecture over what may happen after the inauguration. While changes are likely, the specifics and scope will take time to unfold. For now, here are three key financial issues to watch.

 
 
Global securities markets took a step back in October, as equity markets weighed the potential investment implications of a tight (and contentious) presidential race in the U.S. Bond markets, too, sold-off given continued rhetoric from the Federal Reserve all-but-stating that economic data is supportive of a possible interest rate hike in December. Financials were the lone bright spot during the month given that banks benefit directly from higher interest rates; healthcare stocks lost nearly 7% as policymakers mulled regulation to address recent drug price inflation. A steepening yield curve provided a headwind for bonds, compelling investors to sell corporate bond funds and other “bond surrogates” such as MLPs and REITs.