US financial markets rally on Trump, Republicans sweep

NEW YORK, New York - While the rest of the world was aghast at Donald Trump's stunning, yet shock victory in the U.S. presidential elections Wednesday, with global financial markets having ...


• Investors in the United States shrugged off concerns that a Trump White House wwould herald in sustained uncertainty

NEW YORK, New York - While the rest of the world was aghast at Donald Trump's stunning, yet shock victory in the U.S. presidential elections Wednesday, with financial markets having nothing short of a fit, U,S. stocks soared.

Investors in the United States shrugged off concerns that a Trump White House wwould herald in sustained uncertainty, and ploughed money into bets on a stronger economy and investmen scene resulting from Trump's upset win.

Asian markets began the day with near collapses. Tokyo's Nikkei 225 alone plunged more than 5 percent. Rattled global investors sold off the dollar, buying up the euro and sending it from just over 1.09 to 1.13. The yen, which had weakened to more than 105, soared to nearly 101. Oil prices plummeted four percent. Then European markets kicked in and steadied the panic selling, and by the European close indices were little changed.

Wall Street followed suit and began early to bid up markets. Trading volumes hit their highest levels in five months (since the Brexit vote in June) after Trump stormed the White House and Republicans retained control of the House of Representatives and the Senate.

"Regardless of the fact you had a Republican sweep, there are still checks and balances in place," Art Hogan, chief market strategist at Wunderlich Securities in New York told Reuters Thomson Wednesday.

"So you are going to have some of your more fiscally conservative Republicans that will certainly slow Trump down from doing anything crazy in terms of policy changes." 

The Dow Jones on the day finished just short of its strongedt close ever.

"Anything that Trump mentioned during the campaign, any industry he has mentioned, favorably or unfavorably, is moving today big-time," Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York was quoted by Reuters Thomson as saying.

At the close of trading Wednesday, the Dow Jones industrial average had surged 1.4 percent to end the day at 18,589.69. The closing level was just 0.25 percent away from its August all-time high.

The Standard and Poor's 500 jumped 1.11 percent to 2,163.26, while the Nasdaq Composite climbed 1.11 percent to close at 5,251.07.

On foreign exchange markets the biggest mover was the Mexican peso which plunged nearly 12 percent to a record low at around 20.40. It later retreated below 20.00 to finish the day around 8 percent lower. The government and the Bank of Mexico are believed to be pondering emergency measures to deal with the impact of a Trump win on Mexico.

Despite the gigantic move on the remainder of currency markets Wednesday, by Thursday morning in early Asian Pacific trading, the major currencies had settled back to their levels prior to Wednesday's dramatic moves, helped by Wall Street buying back heavily sold-off positions.

The euro which had soared to 1.1300 a day earlier, was selling at 1.0916 in early trade in Sydney. The Japanese yen, which hit a high of 101.19 on Wednesday, was on the nose at 105. 74. Sterling was little changed at 124.15. The Australian dollar, which hit a high of 0.7780 on Wednesday was friendless at 0.7652.

 

You might also like

November 22, 2017 Wednesday
November 21, 2017 Tuesday
November 20, 2017 Monday
November 19, 2017 Sunday
November 18, 2017 Saturday
November 17, 2017 Friday
Show More