President-elect Donald Trump may not mean the end of the world as we know it. Some investments are poised to soar while others slump as a result of this election. And one market in particular gives you a surefire way to earn potential profits either way: Currencies! Here’s our Forex expert Boris Schlossberg to tell you what to expect next. Best wishes, Mike
Well the world came to an end for exactly three hours once it became evident that Donald Trump would be elected.
The Dow collapsed for 600 points. USD/JPY dropped nearly 400 pips off the day’s highs, and gold soared. But then something unexpected happened. Mr. Trump made his acceptance speech and the Darth Vader tone of the campaign trail was suddenly gone.
Mr. Trump stopped threatening to put Ms. Clinton in jail and, in fact, was gracious in victory. He reached out to all the Americans who voted against him and he sounded Presidential.
The markets stopped selling and started buying as traders realized that Mr. Trump may not be the threat they feared. In fact, Mr. Trump promised to “make America great again” by investing and rebuilding infrastructure.
|How long can President-elect Donald Trump behave so Presidential?|
One of the most fascinating aspects of Mr. Trump’s remarkable run is that it is not ideologically monolithic. By running a highly populist campaign, Mr. Trump’s natural economic policies could focus on helping workers and business owners.
Don’t be surprised if Mr. Trump actually gets behind the hike in the Federal minimum wage, which would be his single biggest political accomplishment for his base and which would also allow him to reach across the aisle to work with the Democrats.
The one asset that is almost certain to suffer will be bonds. Deficit spending will likely raise long-term rates to double their current 2% yield.
|If Mr. Trump gets distracted with social issues and ignores the economic populism of his campaign, the markets will suffer a double whammy.|
If Mr. Trump gets distracted with social issues and ignores the economic populism of his campaign, the markets will suffer a double whammy: Foreign capital will flee U.S. assets as the fractured U.S. society nears a political Civil War. Economic growth will come to a standstill as investors lose all confidence in future demand.
What will be the first warning sign? If Mr. Trump appoints a special prosecutor to investigate Ms. Clinton. So far he has been coy on the issue refusing to fully rule out the possibility … but not emphasizing it as well. But until that happens, markets will continue to favor risk-on assets.