Once again the world wakes to an event they thought could not happen.

Equity markets were boosted ahead of the vote, by the news that the FBI would not be further investigating Hillary’s emails. As this in turn boosted Hilary’s chance of the top job. In the end, it made little difference. Despite some policies that may not be that be considered so business friendly, or the possibility that Hillary will look to break up the US banking system, Wall Street seems to prefer Hillary to Donald.

Then came the day and here we go again, just when we thought lightening could not strike twice, as we awake it looks like Donald Trump is going to be the new President of the United States. At every turn the world believed Trump would fail, and at each turn he pulled through.

One gets the sense that privately, those looking on from afar wondered or even anticipated a last-minute lurch towards Mr Trump, ala Brexit last minute swing. The opinion polls are even being considered these days not only unreliable, but almost a contra indicator to the eventual outcome.

With this bombshell equity markets, will once again be thrown into turmoil when they open. The FTSE 100 is indicating it will open down around 5%, Wall Street a similar amount. It appears that not only in the UK does the electorate vote against the political establishment when given the opportunity. The US dollar’s reaction has been a less muted move, the euro gained about 2.5% and the pound approximately 1.5%.

We expressed the opinion last week, how much damage can one man do to the US economy? One Trump voter when interviewed on Sky, seemed to sum up the reason why Donald Trump looks like entering the Whitehouse. He believed that the American people had the worst two choices to pick from and he decided to vote for the least worst person. Not much of an endorsement. He went on to add that America will be successful no matter who ever the President is. One individual will not make that much difference.  He believed that his vote for Donal Trump will have limited economic consequences.

One big question on investors’ minds could be this morning, what Janet Yellen does now? There has been some speculation that she would resign is Mr Trump was elected. That will cause more uncertainty if it was to happen. Should she stay, once investors calm from the initial shock then hopefully equity markets will do the same, a la Brexit. It’s hard to do at these times but it is always worth remembering, crisis brings opportunity. It may be also worth bearing in mind that Donald Trump believed Brexit was a great thing.

 

Posted on November 9, 2016 .