Trump Election Affects the Stock Market

By | June 28, 2017

Even before the US elections, speculations run wild stock market investors. Mainly it was attributed to the brashness and inconsistencies of rhetoric the Trump campaigns were suggesting. Even though the polls were pointing to a Clinton win, investors had hope.

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When the 2016 US Elections concluded, a lot of investors were troubled about the result. Trump, the president-elect would have a lot of effect on the way businesses would go about. When Trump won the elections, it made a big impact in the stock market. The government can control businesses by taxes, regulations, interest rates and currency inflations. Many businessmen keep close relationships with government authorities to know the changes and direction on the policies. They make good connections to keep their business running. During the campaign, the news about Donald Trump broadcasted a lot of changes in the business spectrum. He mentioned a raise in tariffs on goods that are imported into the US. Many have also believed that his promise of lowering business taxes from 35 percent to 15 percent will be implemented during his time.  Trump also said that the corporate alternative minimum tax should be eliminated. He declared that he will be bringing back manufacturing in the US. His point was to have all products that are originally designed in America be made in the country again and not outsourced from other countries such as China. All products and even jobs opportunities must be America first. Although many promises have not yet been actualized, we can see some changes in the market already. This kind of economic shift from globalization to localization will have a great amount of resistance as Trump critics will say that this will be a step back. There were a lot of rumors that Trump will upset US businesses and investors would invest in others. Global companies that operate across the continent have expressed their concerns as they have tried to adjust in operating across international trade. However, there were also some people who would say otherwise. The shift of economic focus back to “America first” will be the catalyst needed to jump-start stagnant trend of US’s developed market. Trump supporters would agree in the business standpoint of the president being centralized and making the dollar stronger than ever.

According to analysts, the Trump effect has caused an outperformance of the value stock market and higher yields which cause the increase in the value of the dollar. Though people say that it is just an illusion.

Needless to say, Trump’s election has brought anxiety to the market in spite of any economic shift taken. The presence alone of Trump would have greatly impacted the movement of the market. The immediate effect on the market upon the victory was not noticeable but by 2017 effects were seen in a larger perspective. A sudden surge Analyst says that the first 100 days of the president will be the measuring stick of the markets’ bullish or bearish performance trend. If the anxiety of pre-elections will come through months after his 100-day mark, the bear market may take over through the rest of his term. However, if Trump’s “America first” policy gains track months after his 100-day mark, his belief of making America great again, as said in his campaign, may truly come to fruition.

As perplexing the economic scenario is now in the face of Trump’s administration, change is inevitable. The stock market movement will be volatile. As long as Trump’s rhetoric on economic views will be inconsistent on its follow through, US companies will always be on its toes fending off the next wave of volatility on their own.