The result of the US presidential election has taken analysts by surprise and shaken up the financial markets. Read below to see what Steve Ruffley has to say about today’s market activity, presenting both trading opportunities and potential pitfalls.
What the Experts are Saying
One of my favourite sayings when I’m talking about the markets is, ‘Trading is not about being right, it is about being right at the right time’.
‘As with Brexit the world’s top analysts spectacularly got the US election wrong. Like it or loathe it, Donald Trump is the 45th president of the USA. Many longer-term investors will have been burnt by the strong directional moves we have seen across the major asset classes as a result of this.’
‘Why the movement? Fear. Fear of the unknown. Clinton was seen as a proven political entity whereas Trump is just a showman.’
‘The benefit of spread betting is that you can access a wide variety of markets quickly. You can take advantage of the huge uncertainty and volatility in the markets to make small short-term trades. The less time you spend in a trade, the less risk you take.’
‘Use your overall opinions to trade short-term moves around key markets that are trading directly as a result of the US election result. However, please bear in mind that volatility increases your potential risk as well as your potential reward, and you can lose more than your initial deposit.
‘In my view, gold will want to test higher above £1300 and the US dollar will likely weaken, falling to 1.262 against the British pound and 1.140 against the euro.’
Steve Ruffley, Chief Market Strategist at InterTrader
TRUMP Won! Now What?
The victory of Trump is the victory of PEACE, of investment in infrastructure, of equitable trade and of low and middle class. It is the loss of the ARM’S lobby, of China unfair trade and of every integralist.
The economic program of Trump is ‘We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none, and we will put millions of our people to work as we rebuild it.’
The foreign policy will be ‘we will deal fairly with everyone, with everyone. We will seek common ground, not hostility; partnership, not conflict.’
With this economic policy, interest rates in USD will start to increase. A more expansionary fiscal policy will give the opportunity to the Federal Reserve to reduce its incredible expansionary monetary policy.
For the next months we view a volatile market. The possibility that equity market will be weak will depend on the forecast of higher rates.