Monday, November 14, 2016

Before the U.S. election was even finished, the markets began to react to the possible results.  As the idea of president Trump became more and more likely the markets became more and more uncertain.  The price of Dow futures dropped during this time of uncertainty, as well as a number of international stocks.  Many people were freaking out, saying that the markets were going to crash but by the same time the next day stock prices were back to where they were.  Historically elections have tanked the price of stocks just because of the level of uncertainty there is for a close race.  Investors like to know that their isn't going to be any major shift in policy that might effect their strategy.

Now that the world knows the outcome of the election, international markets are expecting rising inflation in the U.S. Donald Trump has talked extensively about trying to balance trade, and it will be difficult for him to achieve without inflating U.S. currency.  CNBC reports: "In Europe, the pan-European index was around 1.27 percent higher on Monday morning. In Asia, the Shanghai composite in China closed 0.44 percent higher, while the Nikkei in Japan closed 1.71 percent higher."  This all supports the narrative that there is expected inflation in the U.S.

http://www.cnbc.com/2016/11/14/dow-set-for-triple-digit-gains-as-trump-trade-continues.html

3 comments:

  1. Its interesting how uncertainty about the US election influences the international stock market and investors. This also helps to show how volatile investment can be.

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  2. Uncertainty seems to be the theme of the elections result. No one knows the future. The stock market itself is really influx with Trump as president.

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  3. A Republican in the White House and Republicans keeping control of Congress increases the chances of a bill being passed that would lead to more infrastructure spending. Expectations of higher spending by the federal government are one of the main reasons why bond investors have sold U.S. Treasuries to buy stocks. There remains a great deal of uncertainty over what type of president Trump will actually be.

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