Trump’s blasting win causes uncertainty and turbulence to the global financial markets

Van Rompuy meets top US CEO’s at NY stock exchange. Location: New York, United States Date: 23/09/2011 © European Union Source: EC – Audiovisual Service

Van Rompuy meets top US CEO’s at NY stock exchange.
Location: New York, United States
Date: 23/09/2011
© European Union
Source: EC – Audiovisual Service

So Donald Trump against all odds won the US elections and will become the 45th President of the United States of America. The latter had as a result to cause severe and immediate turbulences to the world’s financial markets which experienced serious losses in the first few hours of the elections.

However, Trump’s victory speech that came right after calmed the markets which started to return to pre-election levels. His winning speech was totally different compared to his provocative presidential campaign promises and thus provided at least for now a sense of reassurance.

Yesterday, Barack Obama met with Donald Trump at the White House and discussed both domestic and foreign affairs issues. During their meeting, the markets climbed even further with the Dow Jones Industrial Average to increase by 1.43%, hitting a record high.

Trump’s victory aftermath

The scenario under which Donald Trump would win the U.S. elections was among the ones that risk analysts had assessed but it was never expected that the markets would absorb all the turbulences so quickly and bounce back to pre-election levels within hours.

Nevertheless, the fact that the stock markets reacted so rapidly and gained back all their losses is not at all reassuring investors who still worry about the future policies of Donald Trump. It is quite certain that the financial markets will face more volatility as political and economic uncertainty will spread above the White House.

Stock markets and currencies volatilities

The U.S. elections and precisely the win of Donald Trump had as a result to cause global market shocks. The European stock markets fell upon their opening on Wednesday before recovering  swiftly at the end of the day. More specifically, FTSE 100, a capitalization-weighted index of the 100 most highly capitalized companies traded on the London Stock Exchange, dropped by 2% last Wednesday but managed to recover. The CAC 40 index, the most widely-used indicator of the Paris market was down by 2.9% on Wednesday opening while Germany’s DAX index fell by 2%.

However, all major European indices seem to have absorbed the direct vibrations of Trump’s victory quite fast. As far as the currency markets are concerned, the dollar has hit its highest 4-month record against the Japanese yen while the Mexican peso has been plunged by 13% on Wednesday reaching 20,58 pesos per dollar at yesterday’s session. In general, the dollar has been strengthened against most major currencies such as the sterling and the euro.

Obama welcomes Trump

Yesterday’s meeting between Barack Obama and Donald Trump that took place at the White House pushed stocks even higher in the prospect of loosening regulation and reducing taxes. The discussions were about domestic and foreign policies and the beginning of the 72-day transition process till Trump’s official inauguration on January 20.

Donald Trump’s stance after his victory has been totally different compared to the one before the elections. A much more moderate behaviour was evidently noted during his victory speech and his meeting with Barack Obama due to which relative calmness to the financial markets was caused.

Too soon to predict Trump and markets

It is indeed too soon to understand what the U.S. President-elect has in mind and how the markets will be reacting to his policies from now on. The financial markets though will be shaking again in the short-term since there is still uncertainty about which exactly will be the U.S. trade, migration and economic policies.

The uncertainty will keep on ruling in the minds of the U.S. citizens and global investors as Donald Trump will start unveiling his intentions about his future plans. However, investors should not be influenced by the immediate developments and act according to their long-term benefit.

All in all, the financial markets will experience volatilities in the short-term but will tend to return to their normal levels in the long-run. The main take-away from Donald Trump’s win is that apparently the American citizens have expressed, following the British citizens recently, their disappointment against the current “rotten” political system and global world order.

America sails now in uncharted waters and so do the global markets.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

France fails again the exams. Kindly requested to sit in on Commission’s class

“Is Europe innovative? Oh, Yes we are very innovative!”, Director General of the European Commission Mr Robert-Jan Smits on another Sting Exclusive

CDNIFY @ TheNextWeb 2014

European Court rules that ECB’s OMT program of 2012 is OK; not a word from Germany about returning the Greek 2010 courtesy

COP21 Breaking News_09 December: The Draft Agreement Updated

On European immigration: Europe’s Missing Citizens

Commission’s spending totally uncontrolled

Can Obama attract Iran close to the US sphere of influence?

ECB’s new money bonanza handed out to help the real economy or create new bubbles?

Elections in Britain may reserve a surprise for May’s Tories

European Union disenchanted with Turkey

Germany tries to save Europe from war between Ukraine and Russia

Unemployment and stagnation can tear Eurozone apart if austere policies persist

A new Europe for people, planet and prosperity for all

Will ECB win against low inflation by not following Quantitave Easing?

The EU Commission implicates major banks in cartel cases, threatens with devastating fines

“None of our member states has the dimension to compete with China and the US, not even Germany!”, Head of EUREKA Pedro Nunes on another Sting Exclusive

South Eurozone needs some…inflation and liquidity

Young and unemployed the perfect victims of ‘vultures’

Berlin favours economic and social disintegration in certain Eurozone countries

Historical success for the First ever European Presidential Debate

D-Day for Grexit is today and not Friday; Super Mario is likely to kill the Greek banks still today

The Commission sees ‘moderate recovery’ but prospects deteriorate

Global Talent – Professional Internships

SPB TV @ MWC14: The TV of the Future

Greece and Ukraine main items on EU28 menu; the course is set

Opening Remarks by H.E. Ambassador Yang Yanyi, Head of the Chinese Mission to the EU at the Chinese Fashion Night

ECB describes in detail how it exploits the poor

European Young Innovators Forum @ European Business Summit 2014: Europe for StartUps, vision 2020

The next EU President will first have to drink his tea at Downing Street

Young people are Europe’s biggest value and hope

EU leaders slammed on anti-tax evasion inaction and expensive energy

Draghi reserved about Eurozone’s growth prospects

Kellen Europe Hosts EuroConference 2016

The EU patent space and Unified Court are born

Mario Draghi didn’t do it but Kim Jong-un did

A European Discovers China: 3 First Impressions

E-Government can be a remedy for the crisis

Inegalitarian taxation on labour haunts Europe’s social model

Public opinion misled by the Commission on air transport safety

Young people all over the world come together to demand paid good quality internships

Commissioner sings “Volar-e” but the European driver no “Cantar-e”

Lithuania finds the ways to maintain its energy security

Commission’s Youth Initiative fails first hurdle by not sufficiently consulting young people

Last-chance Commission: Why Juncker promised investments of €300 billion?

From Russia with love: Brussels and Moscow close to an agreement on Ukraine’s gas supplies

Greece returns to markets at a high cost to taxpayers, after four years out in the cold

How many more financial crises in the West can the world stand?

A Sting Exclusive: EU Commission’s Vice President Šefčovič accentuates the importance of innovation to EU’s Energy Union

Tax evasion and fraud threaten the European project

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s