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Financial markets caught off guard by a disenfranchised electorate – again

For the second time in less than six months, financial markets have been caught off guard by a disenfranchised electorate sending a resounding signal to establishment politicians and Donald Trump’s victory in the US Presidential election has the potential to make the Brexit vote look like nothing more than a mere supporting act.

By Tony Cross, Monk Communications

That said in early London trade, equity markets are putting on a very resilient face – futures prices had been suggesting the FTSE-100 would open as much as 300 points lower, whereas we’re instead seeing losses of barely one quarter of that. Big pharma stocks are being cheered as the election win should see the controversial Obamacare service eradicated, whilst the precious metals miners are also going to find favour as safe haven investors wade into assets like gold.

Stocks finding positive territory are however very much in the minority, with Experian the worst of the blue-chips, off around 7%. There’s concern that Trump’s polices could plunge the US economy into recession curtailing demand for services like this, whilst any potential contraction in overseas trade is also likely to affect airlines with lucrative transatlantic deals – IAG being another laggard on the day.

There’s an awful lot of uncertainty as to what lies ahead, but if anything the most surprising point has to be that we haven’t seen the carnage for London equities that had been expected – at least not yet, anyway…

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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