- On November 10, 2016
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By Robert West, Jr.
While America watched this historic presidential election, so did the global investment community. If history is any indication, investors despise uncertainty, and the early voting numbers made it clear that a (pre-supposed) Hillary Clinton victory was anything but certain. As Donald J. Trump continued to dominate the swing states and his Electoral College numbers continued to climb, investors started to realize that it was a real possibility that the politically untested, Washington outsider, wildcard candidate would become the 45th President of the United States.
The reaction was swift, markets throughout Asia and Australia dropped significantly. The uncertainty and fear continued as the European markets opened. The dollar weakened. The yen rallied. The Mexican peso fell to a record low. Futures on the Dow Jones industrial average dropped significantly, along with the S&P’s 500-stock index, signaling to many in the financial industry of a Wall Street sell-off at the sound of the opening bell on November 9, 2016.
Then an interesting thing happened, Hillary Clinton conceded, President Elect Trump gave his acceptance speech, and global markets calmed and began to climb. As Europeans went to lunch on By Bob West
November 9, 2016, many European markets returned to where they had started before investor uncertainty set in. Both the futures on the Dow Jones industrial average and the S&P’s 500-stock index gained back ground. The dollar had also recovered. At the opening bell on November 9, 2016, Wall Street was surprisingly calm. While the Dow Jones industrial average initially dropped 64.71 points on initial trading, by the end of the day on November 9, 2016, the Dow Jones industrial average gained 256.95 points over the close on November 8, 2016. A similar trend was seen on the S&P’s 500-stock index, gaining 23.22 points by close on November 9, 2016.
While doom and gloom surrounded the markets overnight, it did not play out on November 9, 2016. This is not to say that investors are in no way skittish. President Elect Trump has made many campaign promises that make many investors uneasy. Will President Elect Trump be able to fulfil those promises, only time will tell? Regardless of his ability to accomplish his goals, there will be market volatility as a result of his election, as there was following the Brexit vote. But there could also be opportunity under President Elect Trump in energy, pharmaceutical and biotech.