Donald Trump could alarm global financial markets in 2016
As I have been quoted as saying today in The International Business Times, Yahoo! and the Khaleej Times, amongst others, the global controversy surrounding Donald Trump’s plans to ban Muslims from entering the U.S., could be a major trigger for volatility in the financial markets for the first half of 2016.
On the face of it, Mr Trump appears to be completely indifferent to the outbreak of condemnation and anger he’s sparked – in fact he seems to be thriving on it! “I. Don’t. Care” were his exact words.
As such, it seems reasonable that we can expect far more of the same rhetoric from the billionaire presidential candidate between now and when the winner is announced in July.
Undoubtedly Mr Trump’s comments are significant as he is the favourite in the race to be the GOP candidate, so by November next year we could see him in the Oval Office as the chief executive of the world’s largest economy.
History has shown us that extreme political views which have dominance in the public eye, such as Mr Trump’s, can spook investors and generate uncertainty in financial markets. Particularly if they occur in such a significant global economy as the U.S.
Therefore, I believe that he could be a major cause of volatility in financial markets throughout the first half of 2016,
Besides the U.S. presidential election, other key factors that are likely to influence or alarm global markets next year include the slowdown in China, falling commodity prices and international security threats.
The majority of investors already anticipate 2016 to be a relatively unsettled time for the markets, and have sensibly evaluated and adjusted their portfolios accordingly so as to take advantage of the potential opportunities that will inevitably arise, and sidestep the risks.
But as it stands, such an increasingly opinionated Donald Trump is making the outlook of at least the first six months of next year, more opaque.