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Monday, January 23, 2017
Trumps positive influence on the stock market looks set to continue
The victory of Donald Trump in the recent United States presidential elections came as a surprise to many people around the world. In addition, the president-elect is not yet done with surprises. Many people in the stock market expected the markets to perform badly after he was declared the winner, but it’s been quite the opposite. The stock markets have improved their performance, and the dollar has soared with the three major US indices registering high records. Looking at this unexpected response can be used to predict what the future has in store for the stock markets under president Trump administration.
Many financial analysts had predicted a Trump win would cause large stock- market sell-offs and investors rushing for low-risk government bonds. And indeed, this is what happened when the results started coming in as he took the state of Florida and increased his electro colleges. Some of the stock markets in the US like Jones Index had fallen by 800 points before the final counts were announced. However, this did not last long as the stocks began rallying after he delivered his acceptance speech in New York. In the speech, Trump assured the stock market of better performance through his plans to boost the economy by revising some of the existing trading policies.
The reason why stock markets are performing better can be explained from Trump’s post elections remarks. He largely focused on his economic agenda that promised growth in all sectors such as corporate tax reforms, deregulation, and infrastructure spending were the core movers in the stock market. Trump seems to understand the world of business as he steered away from commenting on ending the North American Free Trade Agreement (Nafta), his trade-protectionist campaign pledges and punishing china and Mexico through imposed tariffs and revising the bilateral trade agreement with friendly countries such as South Korea.
His shift in these issues has convinced the stock market that he may not pursue these growth damaging measures that he had suggested in his campaign. Trump conciliatory tone during an interview with New York Time’s when he said he had no intention of hurting the Clintons is an indicator that he does not have bad intentions at all.
Considering that trump is a businessman, he understands the stock market better than any other previous United States president. Trump has also been an investor in the stock market, and he knows what should be done and where not to cross. In order to grow the United States economy and the global economy as well, he is aware he cannot bring in policies that can hurt the stock market as it is the backbone of the economy. Most of the Trump promised trade policies reforms are aimed at improving the stock markets by revising unfavorable policies that do not favor emerging investors.
Trump has promised huge projects in the United States that will cost billions of dollars to complete. This has opened an opportunity for potential companies in the stock market who are eyeing these projects to start preparing. As a result, this has made the stock market to rally behind these massive expected projects. Trump has also indicated that the UK is doing better after Brexit and he is ready to work with the UK government for the mutual benefit of the two states. The UK stock market is expected to reap huge benefits from the Trump administration as UK companies are allowed to take contracts and invest in the US stock market. Trump did not mention of any policy reviews with the UK which means that trade within these two countries will continue as usual and there is a high expectation of economic growth in both countries.
Trump's positive influence on the stock market looks set to continue as he seems to revise some of his old plans and policies, to reap the benefits of this you can try trading yourself using a broker such as CMC Markets. Trump has also appointed people in his cabinet who have extensive political and business experience, and they are projected to steer the world economy in a good direction. Some of the policies that he has suggested are also favorable to the stock markets and that why a significant improvement has been registered since he was declared a winner. The stock market is assured of Trump’s support.