CHART: This Has Been One Of The Worst Post-Election Sell-Offs Ever

The stock markets are rallying today.  But they’re still a long way from recovering the gigantic losses they’ve experienced since the election.

“The S&P is down 7.7% since its September high of 1465, but most of the sell- off is post election,” writes Deutsche Bank’s David Bianco.  “The 5.3% decline in the seven trading days since the election is far steeper than the average 2.9% decline experienced by the S&P during the first seven days of sell-offs since 1957.”

However, Bianco is calling it a “gentlemen’s retreat.”  He notes that the sell-off, while sharp, has been very orderly.

“S&P volatility, as measured by the VIX, remains low and unchanged at ~17 since mid-October.”

Bianco attributes it to a “decisive view on dividend tax rates” and that the markets have “re-priced accordingly.”

“Given election results, our estimate on the dividend tax rate not exceeding 25% has fallen from 75% to 50%.”

If nothing is done, the fiscal cliff will send the dividend tax rate from 15% to 43.4%.

Here’s a look at the recent market sell-off against sell-offs since 1957.

Photo: Deutsche Bank

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