Trumping the Election

While the markets have not stopped their workings and there are still many events and countries that deserve our attention, we would be amiss if we don’t address the elephant in the room, namely the election of Donald Trump as the 45th President of the United States of America. This largely controversial turn of events has caused a global shock, as reflected by media and social networks, as well as government statements from around the globe. The US is already experiencing the strain of internal conflict – minorities are being harassed on the streets of previously safe and free areas, people drive around with Confederate flags, and other hateful acts. In a greater context, the results from the election have opened Pandora’s box and Americans are increasingly becoming aware of the internal tensions of their society. Talks of miscommunication, of neglect of the lower classes to the point of their complete despair, of honest conversation and healing, even of revolution, have all contributed to a hugely unstable climate in the world’s most powerful country. There are countless articles online you can consult if you want to learn more about the current situation. There are also publications that speculate what may happen if Trump is to implement some or all of the policies he stood by in his campaign, and how that would affect America. But for now, let’s look at how the elections impacted the financial markets. In the words of the Wall Street Journal, these are some of the stats that have been affected: – Copper is having something of a revival: Trump is expected to focus a lot on infrastructure, which is good for this trading instrument. – European stocks are doing well, going up. – The emerging markets, in contrast, are struggling. They are likely to remain volatile in 2017. – The Dow Jones index is surging, again riding on the expectation that Trump will organize the economy around infrastructure and domestic manufacturing. – The pound might be doing better now. Trump supporter the Brexit and may offer assistance to the UK should it break it off with the EU, which could be the sterling’s safety net. – Morgan Stanley says this is a good time to buy the Swiss franc (USD/CHF). – Oil has been more or less not affected by Trump’s win. The dollar so far has been holding up amid the volatility. The Fed previously seemed ready to hike interest rates in case of a Clinton win, but since this didn’t happen, it’s likely that we won’t see an increase in interest rates this year. As for 2017, the Fed will likely wait to see what policies Trump implements after he takes office.