Stock markets could be looking at a new era of volatility with Trump’s election
Global stock markets are staging a comeback after the shock election of Donald Trump sent Dow futures plunging more than 700 points at one point last night and the Mexican peso hit an all-time low against the U.S. dollar.
Markets around the world, however, remain firmly in the red this morning. In Tokyo, the Nikkei 225 closed down more than five per cent last night. In Europe, the STOXX 50, an index that tracks the continents biggest companies, was down 1.71 per cent.
Analysts said Wednesday morning that despite the respite, investors could be looking at a new era of volatility for markets with Trump’s election.
“He has repeatedly proven to be a volatile character with a very thin skin. In addition, neither Trump nor many of his inner circle have any experience in government,” said Paul Ashworth, chief U.S. economist for Capital Economics. “Those factors suggest to us that uncertainty and market volatility will remain elevated for months, if not years.”
Trump’s victory was a stunning upset, as most polls showed rival Hillary Clinton maintaining a modest lead just before election night. It will also prove a complex situation for the U.S. Federal Reserve, which was seen by analysts as preparing for a 25 basis increase in the interest rate next month. Markets are now pricing in a less than 50 per cent chance that that will occur.
Read the full article at: business.financialpost.com
