The Price Point

The Price Point is a series written by News Editors Brendan Tan and Seth Fenton, covering recent economic events and providing Stuyvesant students with an easy understanding of critical economics concepts that affect our day-to-day lives.

As Stuyvesant students prepare to enter the outside world, understanding the economy becomes an essential skill. In today’s society, knowledge of economics provides us with a foundation for navigating financial issues, understanding the effects of public policy on the market, and making informed decisions about our own personal finances.

How Trump’s Win Impacted the Stock Market

The Associated Press declared that Donald Trump had won the presidential election on November 6. Immediately after this announcement, the stock market began to rise dramatically. For example, the S&P 500 rose 1.41 percent in less than a day, and sits 3.70 percent above its pre-election value, as of November 10. The NASDAQ exchange witnessed similarly momentous gains. Specific companies associated with the Trump campaign especially grew. For example, Tesla—owned by Elon Musk—stocks rose by about 15 percent in one day. These rises were among many and may indicate future economic growth, since index funds like the S&P 500 can serve as indicators of the future market.

European Preparation For Trump Tariffs

Assuming Trump is going to place significant tariffs on exports to the U.S., Europe is preparing a package of retaliatory options towards “a country [refusing] to remove the coercion.” They’re also potentially preparing to offer a package of concessions for the removal of tariffs, mostly consisting of ramping up imports from the U.S. If they fail to avoid these tariffs in some form, Europe could plunge into a state of recession. 

Foreign Firms Continue To Pull Money From China

Even as Beijing desperately tries to bring life to its economy with a broad stimulus package, companies continue to pull enormous amounts of money from the country. China’s economic struggles have, to some extent, shifted the balance of power in America’s favor, which could lead to a tense geopolitical rivalry as the U.S. approaches Trump’s second term in office.

Economics Concept of the Issue

Index Funds

Index funds such as the S&P 500, NASDAQ-100, and Dow Jones Industrial Average are investment funds that replicate the composition of a certain index—a group of stocks and bonds. This means that the funds perform almost identical to the indexes themselves. Index funds often serve as indicators for how the economy is doing and are generally safe funds to invest in for long-term financial growth.