Shake After a Victory For Trump, Stock Markets Went

After a sharp selloff in Asia the night of the US elections, the markets had a recovery on November 9, as investors were replacing the coup from the perspective of the presidency of Donald Trump and became interested in whether their policies could accelerate global economic recovery still fragile.

Stock index futures Standard & Poor’s 500 initially sank 5 percent but recovered most of their losses when shares began to be traded in the United States. The main market indicators ended the day with an increase of more than 1 percent.

By their nature, markets are conditioned to look beyond the moment and into the future. In that sense, the stock market recovery means that many investors are betting that promises Trump, to increase public spending, cut taxes and streamline financial regulations will exceed its rhetoric against free trade.

To that end, actions that would benefit from a more robust economic growth, as banks and companies related to infrastructure and transport, demand had on 9 November. Shares of Bank of America, for example, closed with a gain of 5.7 percent. The equipment rental company United Rentals ended with a gain of 17 percent.

More broadly, however, the market experts warn that the victory of Trump should be considered as a very strong signal from the common man that the time has come that a fiscal policy in the form of increased public spending replace the activism central bank to stimulate economic growth.

For some time, economists have been warning that the policies of central bank interest rates to zero and buybacks, with which the US government and other countries intended to energize the economy, were creating an uneven recovery to boost the real estate market in New York, London and San Francisco while the real economy stagnated.

Increased public spending on roads, bridges and roads could give a boost to the overall economy and reducing tax and regulatory relief will be welcomed in financial markets.

But these strategies have their downside, as the increase in the deficit and debt.

Furthermore, market analysts wonder how these policies can balance Trump, which are basically positive for financial markets, with its promise to lift trade barriers to goods from Mexico and China.

Trump position against free trade has raised fears that precipitate a trade war when global trade in itself is already suffering because of protectionist measures in many countries around the world.

“This is not the Brexit” says Jeffrey Kleintop, investment specialist Schwab Investments, referring to the recovery of stocks and bonds that

He followed soon after the referendum in which the United Kingdom decided to leave the European Union. “This will be a long process of negotiated change. The concern is that Trump fulfill its promise to raise tariffs to China and Mexico “.

In that sense, currencies of emerging markets and stock markets were against the bustling market sentiment. The Mexican peso lost about 8 percent against the dollar and the Chinese yuan remained in its recent trend of weakness.

Investors piled into exchange-traded funds during the initial hours of the market, harder than usual. There was a time when traded funds accounted for 45 percent of all stock market transactions, according to officials at BlackRock. Among the most requested was the iShares fund biotechnology, which increased 9 percent hope that fewer regulations for pharmaceutical companies with Trump.

On November 9, the equity benchmark S & P 500 closed with a gain of 1.1 percent. The Nasdaq Composite Index also ended with an increase of 1.1 percent, while the Dow Jones industrial average rose 1.4 percent. Trading volume was the highest since the turmoil caused in the market in late June by the British decision to leave the European Union.

For now, the market’s willingness to see positive eyes victory Trump seems linked with the prospect of increased public spending.

Whatever comes next, the initial reaction of 8 November to the next day was a surprise. As worldwide was settling the idea that Trump will be the next president of the United States, investors of all countries they tried to understand the financial and economic implications, getting nervous markets.

US stocks were higher, in a break from shaking in Europe and Asia. But the confusion did not give signs of abating, and investors are awaiting joint agenda Trump.

Global investors initially reacted as if the world was on fire. They took their money from the markets in an instinctive boot sale reminded the outbreak of war.

Investors sold shares, first in Asia and then in Europe. They sold oil and Mexican pesos, sinking to unprecedented levels.

They even sold US dollars, although this almost always works as a refuge in times of chaos. However, hours later, the dollar rebounded, oil prices recovered and even the Mexican peso came from its depths.