Following one of the most controversial presidential races we have seen, Donald Trump will become the 45th president of the United States, defying the recent opinion polls.
A “Brexit like” market reaction
The Trump victory represents an uncertainty shock to markets, and has been followed by a predictable selloff in global risk assets, the peso and the dollar and a rally in gold.
At the time of writing the Dow and S&P 500 are turning positive led by sectors that appear poised to benefit from a Donald Trump presidency ( healthcare, energy, financials)
How markets will continue to adjust to this result will depends in part on the tone of the incoming Trump administration and, in particular, whether Trump continues the more conciliatory tone in his acceptance speech or reverts to the rhetoric he has used throughout the campaign.
We expect the election impact to fade as investors return focus to the fundamentals. Before the elections, economic conditions were improving, with stronger growth, low unemployment and rising earnings, a positive environment for equities.
Even though the Republicans will technically have control of the House and the Senate, they don’t have strong control, which will handicap
NOVACAP Asset Management
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