Victory for Trump would generate a negative impact in global financial markets

As America heads to the polls today, global markets have already begun to price in a victory for Hillary Clinton.  However, should Mr Trump win the White House, there will be a double whammy negative impact in the markets.
Global financial markets will have a favourable reaction to a Clinton win, as she is viewed as representing the status quo.  On the other hand, Trump is seen as much more of an unknown quantity, thereby generating uncertainty, causing the markets to respond accordingly.

That said, 2016 has brought about many shocks and surprises.  Looking at the Brexit referendum, the markets priced in a ‘Remain’ victory, but were wrong.  Indeed, sterling was being traded at 1.5 against the U.S. dollar on the day of the referendum.

As such, this is no time for presumption and complacency.  If Donald Trump wins, a double whammy negative impact can be expected on the financial markets immediately after the result is announced.

This is down to the probable sell-offs being compounded by the markets having pre-emptively priced in a Clinton victory, and subsequently being proved wrong.  In addition, markets tend to undertake knee-jerk reactions to such events.

Whether it will be Clinton or Trump waving the victory flag in just a matter of hours, from either a landslide or swing-states-reliant result, there will undeniably be key financial opportunities for investors to make the most of, as well as inevitable risks to circumvent.

However, as it stands, it would only be the most daring of investors who would take a significant stance on either side.

Click here for my LinkedIn profile and Twitter account.

Your comment

Your email address will not be published. Required fields are marked *

Financial Health Quiz

Discover your financial well-being with the Financial Health Quiz.

In just 2 minutes, assess your finances, get personalized results, and actionable steps – all for free.

Take the quiz

Get the latest from Nigel Green