CLSBE - Dissertações de Mestrado / Master Dissertations
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- The impact of the 2016 US presidential election on defense and fossil fuel stock returns : an event study of US and NATO marketsPublication . Blendert, Maren; Stahl, JörgThis thesis explores how the 2016 US presidential election, which saw Donald Trump’s unexpected win, impacted stock markets in the defense and fossil fuel industries. The study focuses not only on the US but also on NATO countries, which are linked to the US through defense and trade agreements. Using event study methods, it looks at how Trump's campaign promises - like increasing military spending, reducing regulations on fossil fuels, and pursuing an "America First" agenda - affected investor behavior in these industries. The results show that the defense sector reacted strongly and positively to Trump's victory. US defense stocks experienced significant abnormal returns, reflecting investor confidence in increased military budgets and government contracts. NATO defense stocks also showed positive reactions, although they were smaller than in the US. This suggests that investors expected NATO countries to align with US defense priorities, such as spending more on militaries. In contrast, the fossil fuel sector had weaker and more delayed responses. US fossil fuel stocks showed positive returns only in longer time windows, indicating initial investors’ hesitation about the feasibility of Trump's policies. NATO fossil fuel stocks had even smaller reactions, likely due to many NATO countries’ focus on renewable energy and stricter climate policies. This study highlights how different industries and regions respond to major political events. By including NATO countries, it provides a global perspective on the financial impact of US elections.