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Easy answer--go check the markets right now (stock futures, mexican peso, etc.).
Doesn't mean jack shit for the long term. Remember when people thought it was the end of the world back in January?
the biggest drivers of the markets are not who occupies the white house. here's what to expect, assuming the Donald doesn't fly off the handle and upper deck the King of Saudi Arabia's golden toilet...
against a backdrop of improving economic growth, rates will rise. this was in place before last night's result. I put the 10y at 4% by end of 2018, write it down. this means that bond funds will take a hit but unless there's panic selling, it will just be losses due to opportunity cost. laddered portfolios and higher relative coupons will perform fine.
stock market will continue to have 1-2 10-20% corrections a year. we had 2 this year, 1 last year, with high valuations and weak guidance, expect volatility to continue.
that being said, expect 5-10% annual returns for the next 3 years as corporations grow their way out of high multiples and the risk premium over bonds lowers as rates rise.
expect consumer spending to pick up. lower tax rates across the board generally means more money in people's pockets to spend, and since that's over 65% of GDP, this could be meaningful
also expect infrastructure spending to pick up, adding to GDP just by pure math (remember gov't spending goes into this equation).
expect a repeal of obamacare. with a GOP sweep, this is all but inevitable. for the sake of the uninsured or barely insured, I'd hope that there are state programs to help the needy, but this will make the cost of running a small business go down, potentially increasing hiring, but at a minimum putting money back in some people's pockets and being generally good for healthcare stocks.
expect lots of rhetoric around a trade war, but it's impossible to say at this point. my hope is that Donald was mostly talk and that we don't close our borders, because most of the US's greatest companies are multinationals and any increased tariffs could hurt earnings meaningfully. that being said, if in the new tax plan there's a mechanism for repatriation of offshore cash, companies could boost capex and in the future offset earnings lost to tariffs with greater productivity. I'm playing a wait & see with this however, still too early to tell.
hard to say on banks and M&A. if Trump repeals Dodd Frank, private credit and alternative lending will tank, and banks will be able to lend again, making working at a BB much more glamorous. if Trump appoints pro competition people to the Justice Dept that don't want mega deals, I'd expect more of the same. however, if he appoints people who don't particularly care about Bayer/Monsanto, ATT/TW, etc., M&A could pick up meaningfully assuming offshore cash is allowed to come home. good time to be a banker.
USD strength. this is a negative for multinationals and int'l stocks that trade largely with the US. also negative for EM equity and debt for major US trading partners. all of this assumes the Donald will get tough on trade. the way to play this is stick with mid & small caps, most of their revenue will be onshore (unlike say PG where over 50% is offshore), so they will be better insulated.
what remains to be seen is how one party control will play out. yes, policy will get passed, but how will this affect markets? if you look at averages (not perfect by any means), an all red gov't gives you below average returns in stocks. my thoughts on valuation kinda agree with this, so if we have 3-7% returns on stocks for the next 4 years, I wouldn't be surprised.
I think now the possibility of Marine Le Pen getting elected in France is much higher. Sarkozy will not have a cakewalk, and this speaks volumes about Western Europe. if the Bundestag goes populist in 2017, look out Eurozone, you're fucked. Matrick GoodBread feel free to disagree, just my $0.02.
most of the negativity around Donald has little to do with economics and a lot to do with his demeanor and mannerisms. if he does decide to default on US debt (doubtful), that would be bad. if he does close our borders (doubtful), that will be bad. however, if his anti trade legislation is offset by pro growth tax policies and repatriation of offshore cash combined with more after tax dollars in people's pockets due to no more ACA, we could see a nice bounce in the economy.
tldr: people freaked out, Donald isn't an ideal choice by any means from a societal/social perspective, but from an investor's perspective, there's a lot of upside opportunity.
assuming tax policy passes unabated...offsetting affects from lower taxes meaning more cash in people's pockets offset by potential overall tax reform (assuming mortgage interest deduction goes away).
I don't think it affects it much, housing prices are driven by different factors, I think the biggest head/tailwind you have is demographics. as the economy plugs along, millenials (biggest generation approaching homebuying age) will buy houses regardless of trump, harambe, or deez nuts being POTUS
Trump elected - Views from outside the US? (Originally Posted: 11/09/2016)
How's the reaction in your countries re: Trump victory?
Here we have basically three big camps:
1 - The "I don't care, it won't affect me, Americans don't even know where our country is" crowd; 2 - The "OMG I love Trump, he is the new hope for conservatives worldwide, I am so happy, he will lead the American poor to a Gold Age, they needed non-politicians" crowd; 3 - The "Shit we're doomed, WWIII will start soon, it's the end of the civilization, this man is a racist monster who will unleash nuclear hell" people;
To be honest they actually are right in some points: The man is a racist;people (not only in the US) are indeed tired of "tradicional politicians"and, finally, we're not Russia so impact here will most likely be limited.
I've read about some more extreme positioning from Europe and a "whatever"from Asia, but then this might be how our local media decided to paint it.
Brexiteers (aka a majority of Britains).
PS you can all stop pretending you think Trump is a biggot to try and sway the vote.
His plan is double what hillarys was. Trumps a builder. I'd expect national building which will benefit both parties and their districts.
Guys a deal maker who was a life long democratic. I fully expect him to work across the isle and get shit.
I'm ploughing money into the market cause I expect an energized economy.
What Happens if Trump Wins? (Originally Posted: 03/03/2016)
Alright...
So this is getting real. Trump is going to become the GOP candidate, despite the fact that the GOP itself is apparently very against it:
http://warontherocks.com/2016/03/open-letter-on-donald-trump-from-gop-n…
On the other hand, at least we seem to have escaped the extreme left/quasi-socialist Sanders, and appear to be facing the worst of knowns (Trump) with a potential candidate with a ton of unknowns (Rodham).
Who the hell is actually voting for Trump? I can't find anyone who says they like him, yet the polls disagree. Why the hell can't Bloomberg just save us all from damnation?
What will/should be the capital markets reactions?
Disclosure: I am not a political expert in any means. Fiscal conservative + Social liberal.
The optimist in me says that our system of checks and balances will keep the most wheels-off scenarios from happening. The pessimist in me says this scheming orangutan will cause World War III. Reality is probably somewhere in between
I'm not quite sure what you mean by "with a potential candidate with a ton of unknowns (Rodham)." Regardless if you love her or hate her, she's been in the public eye for 25 years. I'm pretty sure we know her. She's laid out in detail her plans and she's basically been running for 10 years.
I thought this was a pretty interesting yet long read about Trump supporters. http://www.vox.com/2016/3/1/11127424/trump-authoritarianism
Although it's just my opinion-and opinions are like assholes, everyone has one-is that if he's elected President there's a decent chance that it's the beginning of the end of the US as we know it. I'm not saying the apocalypse arrives in Jan '17 if he wins but I don't think we come back from him. Nothing can go on forever and at the least the American public will fracture. Internationally we'd be absolutely fucked because he'd pursue reckless foreign policy and, rightfully so, any allies we have would be insane to trust us with him at the helm and we'd see a rudderless world and/or a power shift towards China. Personally, and I'm not kidding nor am I a reactionary tin foil hate wearing freak, if he's elected I'm moving to New Zealand or a small island in the South Pacific. I don't want my children to grow up in a country where he's the President or among the people who elected him.
If he's only the nominee of the GOP it's the end of the Republican party as we know it, if that hasn't happened already. If the traditional conservative republican GOP types want to keep control of the party they should sand bag this election, kick Trump out or piss him off enough to get him to leave and run as an independent and come back in 4 years with a candidate to beat Clinton. I'm ashamed of and disappointed in the Republicans who say they're going to support him if he's the candidate simply because they're Republicans. The guy not only is a repulsive wanna be despot who is using hate and racism to fuel his campaign, he's nowhere close to even being a conservative. He's turned what used to be a serious political party into a joke-in the last week he had Rubio talking about small hands and what that means. A US Senator and one of the leading candidates for the highest office in the land is making a reference to penis size? It's a fucking disgrace. I'm all for lively debate and opposing political points of view but he's made a mockery of a serious office. Reagan is turning over in his grave.
Don't let the door hit you on the ass as you leave.
What Trump Supports:
1) Strong Borders with a "big door" for legal immigration 2) A TEMPORARY halt on muslim immigration 3) Ending the carried interest tax loophole 4) Actually FAIR trade - not letting American workers get fucked over by NAFTA, etc 5) Repealing Obamacare, but putting something else in its place so Americans can have health insurance 6) Supporting all the good things Planned Parenthood does 7) Infrastructure spending 8) Lower levels of national debt 9) Pro Union, Pro Police, Pro Military 10) An end to endless interventionist wars (Bush, Obama, Clinton, Etc)
I love all the bullshit hysteria about Trump ruining out standing internationally, endless wars, this country rupturing, racism, blah blah blah.
You know why? Cause we have it all with Bush and Obama. Racism? You can thank Obama for the worst race relationships in this countries recent history. Foreign countries not respecting us? Thank Bush and Obama for this (coalition of the willing, line in the sand Syria can't cross, Iraq II lies, Libya, ISIS, et el).
Thank GOD that Trump is a shitty Republican. I think everyone is about done with conservative, back waters, fuck most Americans, classic Republicanism. Oh so sorry that China and big business won't be able to fuck American workers. Oh so sorry that we won't have endless religious lip service, trying to shut down planned parenthood even though it is one of the major sources of healthcare for most women. No more bullshit lip service about illegal immigration when it does nothing but deprive the poorest Americans (blacks included) of funding for their programs, jobs, higher wages.
This country is already fractured. Frankly, go fuck yourself with your pompous bullshit. No one stopped the American people for voting for Obama, a person who associated with a racist, anti American pastor, who had ZERO experience and thinks of himself as above everything else. Yet we have to stop a person who has actually built something, someone who is transcending parties. Trump is a populist in an era where both sides work together to fuck the American people.
Go take a look at wage growth and labor force participation rates and tell me that either party is doing shit for the majority of Americans. Take a look at Bernie's support and tell me people aren't sick and tired of the two party system.
Me, personally, I would beyond proud to live in a nation that freely elects a person who wants to put America first. I could give a shit what anyone else or any other country "thinks" of America. I think Europe is pathetic and will be an islamic caliphate in 20 years. You think Merkel gives a shit what I think? No.
Trump 2016 - proud of it.
"The guy not only is a repulsive wanna be despot who is using hate and racism to fuel his campaign, he's nowhere close to even being a conservative. He's turned what used to be a serious political party into a joke-in the last week he had Rubio talking about small hands and what that means."
Trump is a wanna be despot? Hate and Racism? No where close to being a conservative? Turned a "serious" political party into a joke?
Suck a huge dick.
1) Racism - prove it? Don't even dare bring up that manufactured David Duke bullshit. Trump is a NYC liberal. If he is racist it is far less than anyone else in the party, both sides (Hillary - black men are super predators, wtf!?).
Islam isn't a race. He called for a TEMPORARY ban until we can vet who is coming in (every country has this right and ISIS has been saying they are using this refuge crisis to slip people in).
2) No where near being a conservative - THANK FUCKING GOD. Last thing we need is another anti-womens rights, bible thumping clown. Yeah, trump is the racist, but every "true conservative" is all about tolerance. Get the fuck out of here.
3) When has the Republican party been either respectable or serious? One forgets the campaigns of past, talking about illegitimate black children (McCain vs. Bush). Or a party that basically shuts down the federal government (Cruz). Both parties are pathetic.
Trump has no fundamental understanding of how the economy works, and thus is a fucking retard. Once people realize he doesn't give any shits about people and working people for that matter, it'll be too late unfortunately
Trump's Plan for Wall Street (Originally Posted: 11/11/2016)
Trump recently released his new website as president-elect: greatagain.gov. Although there aren't too many details on actual policies, you can use this site to find his most up-to-date stances and goals since the election. Here's what he has to say about financial services reform:
And here's a note on his tax plan:
It's important to keep in mind that he committed to lowering the corporate tax rate to 15% (this was also in the midst of some large-scale tax inversion attempts) throughout his campaign. Any ideas on what a 15% corporate tax rate would do to bonus season and/or how feasible this would be?