is Not that everybody didn’t know that Donald Trump could win the u.s. elections, but investors have anticipated a victory for Hillary Clinton. The victory of the republican candidate shuffled markets, always the first to react, the hot. The first can serve as barometer for the general feeling, although her mood also switch easily from night to day. Trump has also changed in an unexpected way, the tone of your speech when he came to the stage to sing victory: appeals to the division in the campaign went on to speak in the union. Resulted: calmed down a little bit, the pessimism in the initial markets.
All fire view of the north american Paul Krugman, Nobel prize in Economics. Says that Donald Trump is an "ignorant irresponsible" that will aggravate the world economic crisis. With it, you fear even a "global recession with no end in sight," reads an online article of the newspaper the New York Times.
The disaster for America and the world has so many variants that the ramifications of economic are at the bottom of my list of fears. Even so, I believe that people want answers and if the question is: when is that the markets will recover, at first glance, the answer is – never- ".
Trump was not the time to hold the shaking felt in Tokyo stock exchange, with a fall of 5%, which had already closed for today. But he spoke just before the european markets open, and the carnage that some might predict was not observed. Far from what happened in June, with the Brexit, in that the bags have arrived to sink 8%. This time, at the opening, were up to 3% and quickly started to mitigate the losses. Until the end of the morning, fluctuated only to the values of the opening.
“there is No reaction of shock, there is a negative reaction,”
those Who look to the frames of the stock market to see everything painted red. But then talk of a wave of shock goes a long distance, as she explained to the TVI24 the analyst Filipe Garcia, of the IMF.
"The term of comparison is the Brexit, there is no doubt. The shock is much smaller at that time. If one year ago we were ask what would shock we would say that this would be the outcome of the u.s. elections," he told TVI24 the analyst.
But the market is more prepared in terms of liquidity. There is no reaction of shock, there is a negative reaction. The Brexit showed the people that the surprises can happen."
Bob Takai, president of Sumitomo Corp. Global Research in Tokyo, also uses this term of comparison, quoted by Reuters, but it’s more apprehensive. “This is the déjà vu of the moment Brexit, very worrisome".
How to explain the difference compared to the Brexit?
immediately, there are two reasons that may be to mitigate somewhat the fears of investors for the end of the day not be as big as it was in June with the United Kingdom. the on the one hand, the results speak for themselves: the "triple victory of the republicans", with the majority in the Senate and in the two chambers of Congress. This sends a signal of stability, according to the analyst Filipe Garcia.
Was far more weighted than what we could expect. The great challenge now is to try and notice up to the beginning of the year that type of mandate will try to do. I don’t know if you’ll have either the will want to the ability to comply with all points of your program."
Henrique Dias, manager of brokerage firm XTB, emphasized the TVI24 that uncertainty should "continue as long as it is not a defined strategy behind the machine Donald Trump. While it is not all put in the clear. There I believe that the markets can return to good times. For now, that will eventually pool are the assets of the refuge, such as precious metals and bonds.
The gold, which is the value, and the Treasury Bonds, especially the German. Germany is the largest european economy, and may take with regard to markets out of this cloud of gray that hangs over the largest economy in the world.
And now, Trump and the Fed?
As says another analyst, Philip Garcia, the question that investors ask is, "Ok, he won, what does that mean for the business?". Trump waved a "great economic plan" and wants to "double the investment" but it will have to wait to see.
There is this question, on the one hand, and the other that was already imminent: the us Federal Reserve will always, as signaled, raise the interest rates at the end of the year before the climate of uncertainty that is expected to soar at least until Trump to take possession, on the 20th of January.
"With the possible actions of the Fed to the end of the year you can divert a little attention from the uncertainty of policy and focus on certain macroeconomic and monetary policy, in case there is increase of interest rates, it is foreseeable large increase in the demand for dollars and great appreciation," says Henrique Dias.
The analyst notes that it is expected that the central bank is independent of the new President in his decisions. Either way, "there may not be much margin to increase" interest rates, since there are economic data worse than expected. Be that as it may, it is still necessary to wait for other, such as inflation, in order to understand how is the economy and if it is able to cope well with this increase in interest. The Nobel prize winner, Paul Krugman declares himself a pessimist:
Now, here comes the 'mother of all adverse effects' – and what comes then is a regime that will show you-ignorant and hostile about economic policies in the face of all the efforts to make it work solutions. We can expect effective support from the Federal Reserve? Not to think about it. Can even bet that the Federal Reserve will lose independence and will be attacked by multiple mechanisms."
Jefferies confirms that “the main risk is the uncertainty in monetary policy", cites the Business Insider. Anticipates that the interest rates may not rise already in December, such as the Nomura: "The expectations of the market have been decreasing rapidly."
The ghosts of the world wars on the prowl
The economist of HSBC, Kevin Logan anticipates a shift of forces on the board budget, with "low-tax, highest deficits, trade restrictions and the international flow of capital and, potentially, a considerable reduction in the work force if Trump plans for the deportation of the coming into force”. Until may not apply everything that touts, but the market pays a price by the possibilities.
And there are those who do not have doubts that the winning candidate will reinforce the reaction against globalization. The case of Deutsche Bank’s strategist Jim Reid, who underlines another point.
"it Is very easy to say that this is very negative for the global economy, but the current policies around the world are perpetuating the recovery soporífera post-GFC [global financial crisis]. A flip is a necessary evil, if Trump is or is not the correct version of this is a matter open to debate."
The Fidelity anticipates also by Business Insider that we are going to "a world of political risk without precedents that undermine the pillars of the agreement of the post-Second World War".
The fall of 12% of the mexican peso is proof of the fear installed for some economies. Much of the rhetoric geopolitical Trump focused in Mexico and in trade with the country where said to want to build a wall border, paid by the own mexicans.
Everything out in the open, for now. The 45th President of the United States just take possession on the 20th of January of the next year. You will need to wait to play to the differences Trump the President / Trump candidate.
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