PWRTrade: “Trump's First Week Sends Markets Higher”

Financial markets around the world might actually welcome the idea of an economically conservative American president, even if his particular brand of conservatism comes couched in the often controversial suit of one Donald J. Trump.

As it became clear on election night that Hillary Clinton would lose in one of the most unexpected presidential (un)friendlies in recent memory, global markets seemed poised to reflect extreme nervousness. But something funny happened on the way to Ms. Clinton’s concession speech. The Big Drop never materialized. 

Election Night

In the early hours of the evening of November 8, Donald Trump surged into an electoral lead that Democratic rival Hillary Clinton could not erase. As his win became evident, Asian markets on the other side of the world sold-off sharply in a knee-jerk response to uncertainty over the president-elect’s unpredictable personality.

The Standard & Poor futures index initially took a sharp 5 percent nosedive, an unsettling state of affairs, which experts expected would lead to a disastrous start to trading when the New York market opened Wednesday morning. To the surprise of market and political analysts alike, the negative trend was short-lived. 

The Hangover That Wasn’t

By the time the opening bell rang on Wall Street the morning after the election, it seemed that the woeful session recorded in Tokyo the night before wouldn’t have legs. American traders hit the ground running and never looked back. By the end of the trading session, major market indicators were up around 1 percent across the board. The Dow Jones Industrial Average (DJIE) finished election week up 5.4 percent, its best trading since 2011. 

Behind the Scenes

As market expert PWRtrade laid out in a pre-election article, this drop and sudden recovery was a distinct possibility in the event Mr. Trump won the election. Here’s the reason why.

“The market is a forward-looking entity. A great many traders had already factored in the possibility he would win.” Says Jocelyn Stone, Marketing Communications Manager. “The spasmodic kick of when it actually happened jilted traders for a few hours but the overall market sentiment towards Trump’s professed goals of shrinking government, cutting taxes, and trimming government regulations are seen as positives by markets. Candidate Trump has been saying these things for months on the campaign trail, so none of them should come as a surprise to anyone who has been paying attention.”
The Bottom Line

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