Stock markets in the UK and across Europe have rallied after Donald Trump won the US presidential election race.
US stocks markets hit record highs this afternoon (6 November) after the historic result, which is being labelled as the “great comeback in political history”.
Markets jumped more than 3% at the news – opening at 42,221.88 before hitting a record 43,514.85.
The US dollar also surged, while the FTSE 100 jumped by 1.5% when markets opened on Wednesday.
It stayed 1.2% higher when it was declared that Donald Trump had won the election.
In Europe, initial rises have started to subside due to threats of high tariffs from the incoming Trump administration.
Some economists have warned Trump’s tariff plans would come as a “shock” to the UK economy.
Richard de Lisle, manager of the VT De Lisle America Fund, who has more than 40 years’ experience investing in the US, said: “Donald Trump’s victory is expected to be better for the stock market than for the bond market because of his liberalism.
“It is estimated that Trump’s economic plans would add a cumulative $7.8trn to the national debt over his term, as he cuts taxes and increases deficit spending.
“Such measures are likely to maintain current government infrastructure spending plans, sustain consumption and keep the US economy strong.
“Combined with his fierce threats of tariffs, these measures should benefit domestically focused manufacturers and industrials.
“Trump is also likely to break with Presidential impartiality and proactively encourage the Fed to press ahead with interest-rate cuts, despite big spending plans.
“This combination could keep the economy going while stoking slightly higher inflation, which would be good for commodity related companies that can pass on their costs.
“Finally, Trump’s rhetoric around both protectionism and de-regulation will be positive for smaller companies that have more US revenue exposure and that are advantaged by reduced regulatory burdens, allowing them to grow faster.”
It does seem perverse that stock markets should rally at the news of a convicted felon winning the US presidential election.
Wrong and inaccurate information.
FTSE 100
6-Nov 8166.68
5-Nov 8172.39
4-Nov 8184.24
All Share:
6 – 4460.03
5 – 4460.27
4 – 4468.37
So where is your 1.5% rise?
The UK market is sclerotic, notwithstanding all the hype.
Even Europe was not exactly gung-ho. The German Dax was up on the 5th, but back down on the 6th. They are going to be hit hard if Trump puts sanctions on their exports – especially their cars. In France the CAC was down on the 5th but had recovered on the 6th to just below where it was on the 4th.
So what is all this euphoria about markets? Sure, in the US the Dow made 1.02% from the 4th to the 5th and 4.4% from the 4th to the 6th – but then they voted for the monster as this is what they expected. For the rest of the world it was all bad news.