I should be saying how does that feel? At the time of writing with only a small handful of states left to be counted it’s looking more likely Donald trump will become the 45th president of the United States.
I hear you ask, how does this happen? Like our recent Brexit vote ultimately people are fed up with ‘The Establishment’ and are looking for someone to try something else, something different. What that something else or different is, is yet to be seen, building a wall probably won’t be it.
“Insanity: doing the same thing over and over again and expecting different results”
– Albert Einstein
The problem is, the outcome of this vote will have a bigger impact than our Brexit vote, believe it or not our Brexit vote was a pinprick on the world scale compared to this, no matter what our media says.
Yes our markets had a wobble and sterling is still struggling but the United States is the worlds largest economy and as they say ‘when America Sneezes the world catches a cold’, I doubt most even noticed when we sneezed or if they did, they soon forgot about it.
This outcome could potentially be extremely troubling for the world economy, it hasn’t been long enough for people to forget the last market crash and people are still jittery and this is the last thing anyone needed right now, Uncertainty! Markets hate uncertainty — and many investors believe Trump’s unpredictable nature and anti-trade stance could bring global turmoil.
The story so far……
Dow futures were down more than 650 points, or more than 3.5%. At their low point on Tuesday night, Dow futures were down more than 800 points.
That puts the U.S. market on track for its biggest percentage decline since August 2011 when they plunged 6.6% after the U.S. credit rating was downgraded.
Stock indexes across Asia were also deep in the red. Japan’s Nikkei plummeted 5.5% and the Hang Seng in Hong Kong dropped around 3%.
While Wall Street is on track for dramatic post-election losses, they are not nearly as bad on a percentage basis as those experienced during the 2008 financial crisis when several plunges of greater than 6% occurred.
The Mexican peso has plunged more than 11% to an all-time low, after seesawing violently all evening as Trump started pulling ahead in key battleground states. The Mexican currency is on track for its worst day since 1994.
Trump’s anti-Mexico rhetoric has affected the value of the peso for weeks. Trump has talked about renegotiating or even ending NAFTA, the free trade deal between the U.S., Mexico and Canada.
Investors turned to assets that are seen as safer bets in times of uncertainty. Gold surged 4.5% and the Japanese yen soared more than 3% against the dollar.
Crude oil also took a big hit as cash flees risky assets. Oil prices were down nearly 4% to $44 a barrel.
Even the Canadian immigration website has crashed.
Lets just hope he isn’t as bad as we think he could be!
If you are worried about investments you hold please contact our office to discuss with one of our advisers.
These are my own views and not of Morgan Peterson financial advisers and do not constitute advice.