Trump President: Hope Falls in the Bags
The bags have been taken with relative calm the victory of Donald Trump in the presidential elections of the United States. In
the final stretch, Wall Street was up 1% and it was heartbreaking to an
uncomfortable result, in part because the market had figured out that
this could happen with an eight-session losing streak. And the bargain hunters did the rebound. But the obstacle course for the market has only just begun.
"This is a historic day, the biggest political disappointment in US history," according to Robeco chief economist Leon Cornelissen. "It is clear that US voters have opted for a candidate who advocates groundbreaking policies, mocking continuity. We can speak of a massive vote against the establishment, which follows the same line as Brexit, which basically reflects voters' status quo.""Increasing uncertainty means that the coming weeks will be adverse to equities, while sovereign debt will benefit from its attributes as a safe haven, although inflationary fears could intensify." In Europe, the European Central Bank is likely to expand Its program of quantitative easing, with its usual implications for fixed income markets, "argues this expert.
"This is a historic day, the biggest political disappointment in US history," according to Robeco chief economist Leon Cornelissen. "It is clear that US voters have opted for a candidate who advocates groundbreaking policies, mocking continuity. We can speak of a massive vote against the establishment, which follows the same line as Brexit, which basically reflects voters' status quo.""Increasing uncertainty means that the coming weeks will be adverse to equities, while sovereign debt will benefit from its attributes as a safe haven, although inflationary fears could intensify." In Europe, the European Central Bank is likely to expand Its program of quantitative easing, with its usual implications for fixed income markets, "argues this expert.
"What
is most at stake now is global trade, as well as global growth, as
Trump has threatened to break important trade agreements, such as NAFTA,
and impose heavy tariffs on products imported from China, Is
about to see how this will materialize but, understandably, the markets
are very worried. Basically, a hurried escape is taking place to safe
havens, like gold or the Japanese yen. They have to liquidate their positions because of the new situation -
which is likely to drive down asset prices further, "says Cornelissen.The Fed, under threat
Cornelissen says that the future role of the US Federal Reserve also hangs in the balance, and that the expected rise in interest rates in December is not likely to happen. "Trump has questioned the independence of the Fed during its campaign, which also worries investors," he explains. "It is clear that she will not renew Janet Yellen as Fed chairwoman when she ends her term in 2018, but it can not be ruled out that she will resign early, or even that Republicans propose legislative changes that affect the independence of this central bank.""On the other hand, it is quite unlikely that the Fed will raise interest rates in December. The irony of this is that Trump himself suggested that the Fed kept interest rates artificially low to help Clinton, so this could be interpreted As a factor that would raise rates, which would be deflationary. But Trump's stance toward the Fed could change rapidly as he takes office. "The overwhelming victory will eliminate the legislative blockadeCornelissen argues that a possible positive effect of the victory of Republicans in all Chambers is that the legislative blockade of President Obama, whose Democratic policies have been blocked over and over by Congress, in Republican hands, will be eliminated for a long time. Part of his eight years in office. Republicans were expected to retain control of the House of Representatives, but Democrats believed they could win in the Senate, which plays a more decisive role in confirming the President's appointments."The most important thing is that the Republicans are going to win the majority of the Senate, which will be vital for the approval of the candidacies proposed by Trump for the positions of his Cabinet and the Supreme Court," says Cornelissen. The legislative blockade would thus be eliminated, although a majority in the Senate might not be enough to prevent the Democratic minority from blocking things. The key question is what will be Trump's priorities. "The "plus" of infrastructure investmentCornelissen says that a positive element for economic growth will be the increase in infrastructure spending in the United States, since one of the few aspects in which both candidates agreed was the need to repair the country's battered roads and bridges."Another positive aspect is that Trump has proposed a drastic reduction of corporation tax, which could mean the return of US capital to the country, since many American companies have been stocking their money abroad," says Cornelissen. "It has said that no US company should tax more than 15% of its profits, which is a significant reduction from the current maximum of 35%, which would be favorable to the benefits of American companies in the long term."
Cornelissen says that the future role of the US Federal Reserve also hangs in the balance, and that the expected rise in interest rates in December is not likely to happen. "Trump has questioned the independence of the Fed during its campaign, which also worries investors," he explains. "It is clear that she will not renew Janet Yellen as Fed chairwoman when she ends her term in 2018, but it can not be ruled out that she will resign early, or even that Republicans propose legislative changes that affect the independence of this central bank.""On the other hand, it is quite unlikely that the Fed will raise interest rates in December. The irony of this is that Trump himself suggested that the Fed kept interest rates artificially low to help Clinton, so this could be interpreted As a factor that would raise rates, which would be deflationary. But Trump's stance toward the Fed could change rapidly as he takes office. "The overwhelming victory will eliminate the legislative blockadeCornelissen argues that a possible positive effect of the victory of Republicans in all Chambers is that the legislative blockade of President Obama, whose Democratic policies have been blocked over and over by Congress, in Republican hands, will be eliminated for a long time. Part of his eight years in office. Republicans were expected to retain control of the House of Representatives, but Democrats believed they could win in the Senate, which plays a more decisive role in confirming the President's appointments."The most important thing is that the Republicans are going to win the majority of the Senate, which will be vital for the approval of the candidacies proposed by Trump for the positions of his Cabinet and the Supreme Court," says Cornelissen. The legislative blockade would thus be eliminated, although a majority in the Senate might not be enough to prevent the Democratic minority from blocking things. The key question is what will be Trump's priorities. "The "plus" of infrastructure investmentCornelissen says that a positive element for economic growth will be the increase in infrastructure spending in the United States, since one of the few aspects in which both candidates agreed was the need to repair the country's battered roads and bridges."Another positive aspect is that Trump has proposed a drastic reduction of corporation tax, which could mean the return of US capital to the country, since many American companies have been stocking their money abroad," says Cornelissen. "It has said that no US company should tax more than 15% of its profits, which is a significant reduction from the current maximum of 35%, which would be favorable to the benefits of American companies in the long term."
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