Donald Trump’s victory over Hillary Clinton has been compared to ‘Brexit x 10’ with the phrase ‘may you live in interesting times’ coming to mind at the same time.
As we are now in uncharted waters with a President-Elect who has been described as ‘the imperfect candidate with the perfect message’, you may wish to read some more detailed analysis than listen to the repeated sound bites in the news!
Whatever your view of recent events, In Accountancy’s Sarah Harkness looks at the possible impact of this election result especially in relation to how it may affect trade, relations and potentially the financial markets:
Expert Opinion from Sarah Harkness:
With his avowed aim of ‘making America great again’, President-Elect Donald J. Trump goes to the White House today to start talks on the transition of power before he is sworn in as President on Friday 20 January 2017.
The reasons why Donald Trump will be inaugurated as the 45th President of the United States will be debated long and hard. Was it that people who hadn’t voted for years turned out to support him? Was it all down to the white working class? Or his divisive rhetoric during an often bitter presidential campaign?
Right now, we don’t know. What’s certain is that, like Brexit, Trump’s victory was a defeat for conventional politics; a statement that ‘ordinary Americans’ were tired of being taken for granted and wanted a candidate who appeared to understand their fears and worries. As one commentator put it, Trump may have been “the imperfect candidate” but he had the “the perfect message.”
What can we expect from his administration – and how will this affect American trade, international relations and, potentially, world stock markets?
The immediate impact
Early on Wednesday morning, the FTSE 100 index of leading shares opened down 145 points (roughly 2%), whilst the dollar also fell on international markets. However, the FTSE quickly recovered to be down by just 0.5% at lunchtime on Wednesday. The Mexican peso declined sharply against the dollar as it became apparent that Trump would win, given his stated intention to introduce trade barriers against Mexican exports: again, though, both the dollar and the peso recovered some of the lost ground after their immediate falls.
Trump’s victory speech was conciliatory; his advisers have been quick to emphasise the strength and business experience of the team he will assemble around him. That hasn’t stopped some gloomy predictions, with HSBC claiming that Trump will steer the US into a recession ‘after a year or two.’ City Index, however, have suggested that Trump in office will be far more conventional and less maverick than Trump on the campaign trail.
What was Trump proposing? – Read on
