The victory of Donald Trump has pushed the index feature Nikkei. For the moment, european markets are struggling to not give in to the panic.
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panic gripped the investors, in the night from Wednesday 8 to Thursday 9 of November, at the first signs of a possible victory of Donald Trump. Money markets and shares have unscrewed concert, under the combined effect of the surprise in the face of an election promise by the survey institutes to Hillary Clinton and, especially, in the face of the fear of the arrival at the head of the first economic power in the world of a president advocating a protectionist hard, and the questioning of international treaties.
in The United States, the dollar lost 1.6 percent against the euro on Wednesday in the early morning, compared to its value from the day before. In Mexico, the peso fell by nearly 12 %, after having touched a record low against the dollar. For their part, the stock indices dropped out from one end to the other of the planet : in Japan, the Nikkei closed down $ 5.36 % (16 251,54 points), while at the opening of the european stock Exchanges on Wednesday morning, the DAX in Frankfurt and the CAC 40 lost respectively 2.7% and 2.5% in early trade. The other places were in unison.
A world ” more risky “
Other indicator that is always well attended, the MSCI emerging markets index reflected also to the nervousness room, accusing its largest decline (down 2.5 %) since the shock of the Brexit, the 23rd of June. By an effect of the pendulum, the values say “shelters” were highly sought after by investors. Wednesday morning, the gold earned as well 3,35 %, while the yen and the swiss franc appreciated.
such A decline in financial markets in case of defeat of Hillary Clinton, a synonym for continuity in american policy, was to be expected. the ” The world was not going well becomes even more risky and it is a negative signal for all risk assets “, summarizes Philippe Waechter, director of economic research of Natixis Asset Management.
” The real question for me, this is the time of the correction, not its amplitude in the short term. It will be necessary to worry about possible contagion to the real economy if these disturbances may be prolonged, “, analysis Michala Marcussen, chief economist at Société générale CIB.
In particular, ” in the very short term, markets will watching for the statements of central banks “, continues the economist. After the surprise vote of 23 June in favour of the exit of the Uk from the european Union, the institutions of money were made to calm the storm. Their action was quickly reassured operators.
” A leap into the unknown “
But the leadership of the United States is much more crucial to world markets than the fate of the United Kingdom. To the extent that the effect Trump promises to be much more rapid than the Brexit, the outcome of which still remains in limbo. The fact that the prospect of a rate hike from the Fed as early as the month of December away, – a movement of favor with the markets – should help to support prices.
beyond that, the investors will of course watch the first pronouncements of Mr. Trump, whose inauguration is scheduled for 20 January. The big question remains of what part of his program, the Republican candidate is now going to implement it ?
” It really is a leap into the unknown because we simply do not know what kind of president Trump will be. Will continue in the wake of the campaign to be the demagogue who threatened to put in jail his political opponents, build walls on the borders and start a world war for trade ? “, question the analysts of Capital Economics : ” Or will become-t-he a man of state, capable of directing in a measured way ? “
The first statements from Mr. Trump, which is shown reconciling with his opponent, can leave to hope that the billionaire abandons the rhetoric of aggressive campaign. The president-elect has insisted on the quality of its economic programme. A topic which also concerned investors.
fiscal Stimulus
” The paradox is that the fiscal stimulus included in the programme of Donald Trump appears positive in 2018 for the u.s. economy. However, over the long term, more debt and more protectionism will weigh on potential growth in the united states as a world “, points out Mme Marcussen.
” His economic program is not applicable in the state, as it cannot finance its recovery plan. It is also this that creates the uncertainty. To finance its deficit, the u.s. economy needs outside investment. To attract them, and given the lack of visibility that accompanies the election of Donald Trump, the dollar will logically continue to decline “, adds Didier Saint-Georges member of the investment committee of Carmignac.
Finally, the largest uncertainty lies in geo-politics. the ” If the president Trump is implementing its promises on trade and migration policy, a contraction in global trade and u.s. GDP are possible “ prevent analysts from Exane BNP Paribas.
Upcoming meetings : in Austria and Italy
above all, the victory of Donald Trump, who has not been more anticipated than the Brexit, is expected to lead the markets to take better account of the political risk. Because twice this year, the markets, such as sounders, are deceived.
In a note dated October, analysts at the Group warns against rise of populism observed in all western countries. the ” The political risk is probably the result of a shift in the perception of the effects of globalization., ( … ), which seemed a necessary evil to grease the wheels of the global economy is now seen as a “scam”, according to the about same employed by Donald Trump (…) “, adds the note. And call investors to guard against possible ” programs adverse market likely to nibble on the profits that multinationals have pulled out of the flow of goods and capital “.
After the shock Trump, the markets still have important appointments : elections in Austria and the referendum in Italy, at the beginning of December.
also Read : Why markets are afraid of Donald Trump
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