STOCKS | Fannie Mae and Freddie Mac Extend Post-Election Slide, Down About 25% in Two Days

Fannie Mae and Freddie Mac common shares extended their post-midterm-election declines as the Democrats’ landslide victory led investors to reassess the companies’ prospects for exiting government control. According to Sina Finance, Ben Elliott of Industry Research wrote Wednesday that after Democrats swept both chambers of Congress, the Trump administration may have fewer options for freeing the companies from government conservatorship. Elliott said any gradual, orderly exit from conservatorship would likely face congressional hearings, subpoenas and scrutiny over housing affordability. Fannie Mae fell as much as 15% intraday Thursday, bringing its two-day decline to about 25%; the intraday drop was its largest since March. Freddie Mac also fell as much as 15% Thursday, with a similar two-day decline. Both companies are down more than 60% year to date as investors have grown less optimistic about the Trump administration’s prospects for ending government control.