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Trump: What he means for investors

The good news and the bad news.

JOHANNESBURG – It was never considered a highly likely scenario, but on Wednesday Donald Trump was elected the 45th president of the United States.

The announcement came as a shock to market participants as pundits mostly predicted a win for Democrat Hillary Clinton.

The outcome highlights the growing unhappiness of voters about the status quo, faltering economic growth and rising inequality and a system that seemingly only caters for a rich minority. Many voters seem to argue that any regime change would improve the situation.

Ray Wallace, chief investment officer at Taquanta Asset Managers, says the outcome is a protest vote against the way economies are run.

The Trump win comes just a few months after Britain’s shock vote to leave the EU caused a major shake-up in world markets.

While the unemployment rate in the US is very low, the quality of jobs is not always desirable – people have been taking strain and the quality of life has deteriorated, Wallace says.

Peter Brooke, head of Old Mutual Investment Group’s MacroSolutions boutique, says political shocks have become the new driver of volatility in the investment universe.

Trump’s surprising landslide victory highlights the very strong desire for change and the inability of the elite to gauge the political climate, he notes.

“All around the world, populists are gaining on both the left and right. We believe this is a lagged impact of the global financial crisis which has resulted in very soggy global growth and rising inequality as central bank stimulus has helped the rich,” he says.

“We don’t think this trend is over and expect continued political uncertainty, moving to Europe as they start their calendar of elections.”

Deon Gouws, chief investment officer at Credo Wealth, says although he didn’t expect Trump to win, the shock factor is a lot less than during the Brexit vote.

Although markets experienced an initial sell-off, the broader reaction wasn’t nearly as extreme as during the June vote. After falling sharply in early morning trade, the FTSE/JSE All Share Index recouped its losses, closing 0.55% higher at 50 977.85 on Wednesday while European indices also recovered. Although Dow Jones futures initially predicted a bloodbath on Wall Street, the Dow and S&P500 were also in the black shortly after 18:00. 

“Maybe we can argue that it was largely in the price – that the market didn’t get it that wrong,” Gouws says.

But where does Trump’s victory leave investors?

While the US Fed was widely expected to hike rates in December, the current uncertainty sparked by the surprise outcome may convince the Fed to postpone the move once again.

Gouws says whenever there is a shock in the system, markets initially go into risk-off mode, which largely explain why the rand was the worst hit currency after the Mexican peso early on Wednesday. The peso collapsed against the dollar as it became clear Trump would win the election. The rand is highly traded and reacts swiftly as investors take risk off the table.

But temporary share price slumps may offer buying opportunities.

Gouws says some sectors are also likely to do better under a Trump regime. Healthcare stocks have been under tremendous pressure over the last year – in large part due to Clinton’s healthcare policies.

These risks have subsided with the Trump win and healthcare companies should recover somewhat.

Richard Robinson, fund manager for the Ashburton Global Energy Fund, expects Trump’s win to trigger opportunities in the fossil fuel sector. 

Wallace says at this stage it is too early to get a clear sense of the long-term impact – various scenarios could play out – but nothing will change overnight.

Trump mooted various protectionist policies during his campaign and wants to develop the US manufacturing industry.

Wallace says he is not sure whether Trump’s plan would be successful, but if trade tariffs are introduced it could affect economies like South Africa if it becomes more difficult to export to the US.

South Africa already has political and economic challenges and ratings agencies could view the election outcome as growth negative for South Africa.

Gouws says if you ignore the politically incorrect comments and noise, Trump was always the more business, economy and therefore market-friendly candidate. Although markets ignore this during the initial shock and sell off, the American economy could be stronger in two to three years time due to lower tax rates and other factors associated with Republican policies, Gouws says.

At this point, however, the long-term implications are anybody’s guess.

“Everybody is just dumbfounded at the moment and trying to figure out what the effects are. It is the same with Brexit – really long term, what are those effects? We really don’t know,” Wallace says.

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a whole article just to tell us what we already know – THAT NOBODY KNOWS!!! NOT EVEN THE SO CALLED, OVERPAID EXPERTS!!! LOL!!!

I called a victory for the COns party, for Brexit and for Trump

I am a non-important and non-connected person

Why can I read these matters successfully and not the experts? Perhaps because economists and other experts only talk/listen to themselves.

I see Wall street did well yesterday – I heard all the socalled experts predicting carnage on the US markets. Wrong again.

It is time the world stop and listen to the little man in the street (you can find me in the gutter mostly) and then make projections from there.

ZAR is doing fine for past few weeks – given the turmoil in politics it should have been R25 to Pound and R20 to $. Little people influence the economies by just doing what they do every day – living life.

It is time the socalled experts either retire or start listening properly.

You are spot on right there. The experts lie and lie and than start believing that their lies are a gospel truth. Gone are the days where we could just rely on newspapers and big media house for stories that shape our opinions. These days with the internet and a bit of time. You can be able to separate the truth from all the things we are being sold daily.

what is all the fuss about? Is it because this guy has a real set of konjoras and says it as it is. For once we have a real man, not a politician who is not afraid to zero in on the issue and fix it, unlike the mealie mouth politicians who only think of their pocket and re-election.

Go Donald Go, kick arse where it is needed. We all need that.

PWGG, memories are indeed short. a few years ago the very same “kick arse” attitude gave us an invasion of Iraq as well as the global financial crisis.

That outcome was rigged to enable the string pullers to enact the “HUNT for WMD” & the economic fallout that followed. I could be waaaaaaay off cue but me doubts there’s a Knob Chaney & a Thief Goldspan behind this result…!

Well maybe this kick arse will fix it. Bush was an idiot who was itching to play with his toys.

No actually the kick-arse is to be against these useless so-called advisers who keep telling us the wrong thing. Useless, useless, useless money-sucking sycophants who cannot get a proper job.

Yes he is an outsider and is not bound to please anyone except the man on the street. He fought against the elite and conquered.

Politicians will be out of a job soon!.. People like Trump getting into government will cause Universities to re-think the “Politician’s curriculum”, it has been quoted by many SA executives over 40 years and longer that this country should be run like a business. The current regime, SOE’s, municipal outfits and nearly all run at a loss, must be the perfect MBA business case study for universities….how to reduce revenue/expenditure/debt, reduce cost and improve efficiency and services.

Then again you might not have to be a rocket scientist to see what is going on, its not sustainable.

Are the Politicians so slow to wait 20 years to print a graph to see the direction of the problem?

Herman Mashaba is another example of a successful businessman cleaning up after the corrupt career politicians.
Jo’burg will be a much more efficient and organized city with Mashaba and the DA running it.

So since when are academia an intellectualism been superior to student protests and trade union activism? After all what do we think is actually running this country? Cleverness or selfishness (corruption)? Really!! Don’t you know ANYTHING?

In most western countries and in SA anybody who does not toe the liberal line pushed by most media is branded an extreme right or even neo-nazi. So in public discourse people often rather say what is expected than what they really think. The Clinton camp branded Trump supporters ignorant racists and when pollsters asked them lot of them rather lied about their preferences. Luckily voting is still secret so they could vote according to their conviction. The same happened during the Brexit vote and in Europe polls regularly underestimate the voting percentages for right wing and nationalist/anti-immigrant parties.

More expert commentary from yet another set of experts (I use the term loosely) who to a man or woman on Monday 7-11-2016 were all sure as hell telling their clients that Hillary would win and The Donald would be just a footnote in the history books.
Wrong! Yet these self same experts on the 9th of November are telling us all what the future holds.
I’m fully expecting them to soon trot out their ancient and fallacious BAU slogan of “There’s never been a better time to be in stocks” Followed by “It’s time in the market not time in the market” finally, followed by (in a few weeks )a contemptuous shrug of the shoulders…and…wait for it…”Nobody could see it coming”
Too bad they didn’t let us know about the “Nobody could see it coming story” BEFORE we handed over our pensions/life savings!

Agree have heard all that jargon over and over again. Like stockbrokers waiting for the US Agric payroll or the futures close out on Friday. Basically saying to you that they have no fricking clue.

as usual bbc and cnn called it or should i say wished it wrong because Trumpanator called them and Hillary out for what they are PARASITES.
IF YOU NOT ONE OF THE KISSING COUSINS like Katy Perry , jz etc who feed off one anothers drivel and don’t have a California mentality you are out.
professional politicians are the biggest drain on a country because they are so out of touch with reality

Makes me think of the guy that was asked if he would give his business to a politician to run, when he said no was asked why then give the country to them to run.

“Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.” – Frederic Bastiat

America gets a president who is a chauvinistic, homophobic, racist and sleazy populist. Now where else have we seen that happen?

Give one good reason why whites should look forward to the prospect of losing political power? If there’s no reason ( there could be, if so please mention) why not try to preserve it? We see identity politics where every groups possible could further their agenda, that is blacks, hispanics, gays, woman, muslims etc except for white christian males. Then the labels are thrown at them Nazi, racist, homophobe etc.

That is what you have been told by the media and that has stuck in your head. Take your head out of the gutter and smell the roses. Donald J. Trump is a good man. Just you wait and see how he is going to turn America around for all races. He has promised to invest 100 billion dollars to Blacks and Lations in America. This if for uplifting their communities and inner cities. Why would he be doing that if he was a racist? I guess your friends in big media houses are not covering that in big headlines.

An interesting comment someone posted on the blog of The Economist, another “expert” –

Here’s what happens next: everyone goes into denial overdrive, giving “explanations” about how things aren’t really going to change very much. Some examples: “He’ll surround himself with good advisers…” “We needed someone to shake things up a little…” “He didn’t really mean everything he said…” “We’re a great nation and one man can’t make all that much difference one way or another…” “I don’t believe this will affect me personally…” “I’m sure once he understands our fundamental importance to the […] economy he will change his tune…”

All these quotations are translated from the original German and come from newspaper commentary in the 1930s

It amazes me that this comes out after the panic. I always thought Trump will be better for the economy than Clinton but I couldn’t say anything then because you automatically fall into the category of a doomsday theorist. Give the guy a chance, the Obama regime has created a credit bubble and I doubt Clinton was going to fix that. The market has spoken for it self already – things are back to normal and the Fed might actually move this December.

The world media told us Brexit would never happen and Trump would never become president.They also told us Trump would be bad for Wall Street.I speak under correction but doesn’t Wall Street always prefer a Republican in power!

Those who are surprised by Trump’s win are those who were not following the election cycle closely. Or its those who are having blind loyalty towards the Democracts. Or are those who were listening to anything that the bias media was spitting out. Media houses like the Clinton News Network (CNN) were consistently twisting stories and making Trump to look like a demon. Trump rallies were consistently having thousands and thousands of people attending. Hillary on the other had was attracting very low crowds. The other day Tim Kaine, Clinton’s running mate, only had 30 people in his rally.

The American people were fortunately able to see through all these issues and voted the right candidate in. Trump is good for America as he is advocating jobs, stronger borders and decisive fight against Isis. More so he is not bought by the special interests like Clinton was bought long time ago. He is a business man and he will mostly make business decisions that are going to go a long way to uplift the American economy. I am not sure when was the last time I saw something saying “Made in America”. In a few years we are going to start to see that as quality jobs will return to America.

A stronger America should be good for the world at large as America and its company’s have an influence all over the world.

Hail President elect Donald J. Trump. The “Don”!

End of comments.

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