If you ask a group of people who voted for Trump what their main reason for choosing the billionaire businessman as their next president is – a significant number would say their reasons were financial. People who have money invested in businesses, the stock market, property and other assets are interested in protecting their investments and they believe that Donald Trump is the best person to do that. But what does Trump winning actually mean to the stock market and what can you do to ensure that you make the most of this unusual presidency?
An Overview of the Stock Market Right Now
You can take a look at the stock market charts on any of the top investment firms out there, like the ones on the Glenmore Investments website which shows currencies, stocks, commodities and the indices. Right now, things could be better but they aren’t that bad. The week following the surprising election result was relatively upbeat with the Down rising 5.4 percent – outperforming expectations and the S&P 500 gaining 3.8% at the end of the week. Small domestic caps showed even better as the Russell 2000 showed an upsurge of 10.1%. At the beginning of the week, equity indices gained in the days and hours before the election, as a Clinton result was expected.
The Worst That Could Happen
When you look at scenarios that project the future for the stock market, you not only have to take into consideration that Trump is the new president of the United States, but that the House and Senate are both controlled by the Republications as well. So, the worst that could happen with the stock market (thanks to all three of those stipulations) is that the market could drop – big time. Obviously, right? But some are looking at what happened to the S&P after Brexit and thinking that the market might drop, but it will then bounce right back. Experts don’t think that’s the case.
Experts are predicting some negatives from the Trump win in some specific areas of the market. For example, when it comes to IT and electronics in general, Trump’s tax on imports is going to create a problem for companies that rely on these foreign-produced goods. Trump’s increased demand for oil is also going to create a problem there. Experts also say that in the coming weeks, the S&P 500 could also drop anywhere between 11% and 13% and that could be disastrous for investors.
The Positives That Could Come From the Trump Presidency
Of course, there are some good things that could come from the new president. Investors will be lining up for Trump’s prominent support of business and energy as well as policies of taxing foreign money. The market could rise in the next few years before inflation starts driving rates up.
There are also some things that could be positive in several specific areas of the market. For example, Trump is proposing reduced regulation on oil and that could mean that the oil and gas industry could grow if the market activity is driven by this reduced regulation and not by commodity prices. In addition, financial products have a history of doing better under Republican presidencies and with a Republican in the White House and controlling the Senate and House, this could mean good things for them. Finally, since the promise of an increased minimum wage had come from Clinton, the problems that were going to be felt by labor-intensive industries will not happen, since it is Trump and not Clinton who has won the presidency.