From Donald Trump's unexpected election through his inauguration, US equity markets followed a path for their third straight positive month. The media has frequently associated the election with black swan events, taken from Nassim Taleb's 2007 book describing the implications from events which are impossible to predict. We study 'the impact of the highly improbable' election, in the spirit of Taleb's duly chosen subtitle.

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• ETF investors fed the Trump rally that favoured small caps and financials, along with high beta and value stocks
• IHS Markit has nudged up the average oil price forecast for 2017 and, as expected, stocks positively exposed to changes in oil prices outperformed since the election
• IHS Markit Global Trade Atlas posts a 2016 US trade imbalance with China that captures 47% of the total, while the fourth highest deficit is with Mexico, and trade rhetoric certainly affected positive election-month performance for stocks with the highest exposure to domestic sales
• Given higher political risk and an outlook for higher commodity prices and interest rates, we find that stocks with low costs to borrow and industry relative value outperform at the expense of small caps during periods of high inflation and market volatility

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.