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The following guest post is courtesy of Luis Aureliano, a business writer and financial analyst. With over 15 years of experience in global finance and an MBA in economics and management, Luis’s areas of expertise include business, marketing, communications, personal finance, macro economics, stocks and emerging markets.
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On election day, markets were going crazy. As soon as Trump started to take the lead in the polls, Dow, S&P, and NASDAQ futures all fell hard. However, over night, things started to correct as futures trading, options trading, and more went crazy! Nonetheless, things are back to level and one big question remains… Is Donald Trump really bad for the market?
What We’ve Seen Through The Campaign
Throughout the process of the campaign, there was a clear correlation between the market and the polling seen. When Donald Trump was doing well, the market was trending downward, and when Hillary was doing well, the market would recover. So, throughout the campaign, the overall consensus was that if Donald Trump made it into office, the Dow would fall between 3% and 5% at least.
What We’re Actually Seeing
There’s no question about it, Donald Trump has been elected by the American people and he will be the next president of the United States of America. So, is the reaction what everyone thought it would be? Well, not quite. While futures went wild over night, the market seems to be back to normal already. The Dow is slightly in the green along with the S&P 500 and the NASDAQ. In fact, since election night lows, blue chips have soared and traders have been taking advantage! From day trading to binary trading, traders are becoming more active now than we’ve seen for some time.
Is A Donald Trump Presidency Bad For The Market?
The truth is that no one knows. We know Trump’s history in business, but with no political background, we don’t know how that will equate to is presidential campaign. Nonetheless, there are a few important points to consider here…
- Republican Views On Taxes – Donald Trump has very republican views when it comes to taxes. If he does what he has said he will do, taxes on corporations and small businesses alike will likely fall. This will help overall economic growth and will likely equate to gains in the market.
- Republican Economic Views – Throughout the history of the United States, republicans have always been a good thing for the economy. While Donald Trump isn’t your classic republican, his economic views meet up well with the republican party. As a result, we have to at least speculate that Donald Trump will improve economic conditions.
- Geopolitical Shakeup – This is where things get interesting. Trump says he is going to tear up the NAFTA agreement and renegotiate other trade and geopolitical agreements. This could lead to global economic changes, will lead to foreign trade changes, and will likely affect the market. The question is whether or not the affect will be positive.
At the end of the day, I don’t think a Donald Trump presidency is going to be the best thing the market has ever seen. However, I will say that I don’t think he’s going to be bad for the market either. At the end of the day, if Donald Trump does most of what he says he is going to do, the market will likely have a positive reaction to his presidency. However, in recent news, experts have pointed out a caveat. The caveat here is that we simply don’t know, considering what we’ve seen from Trump as a candidate, what is actually going to happen. That uncertainty could turn out to be bad. So, if you’re playing the market now, make sure that you’re considering the risks.
What Do You Think?
Is the Trump presidency good or bad for the market? Join the discussion in the comments below!