In disappointing news this morning future episodes of 'The Apprentice' in America are now on hold due to Donald Trump becoming otherwise engaged - but this does not mean we will see less of him. For as of 2:30am EST (7:30am GMT) this morning Mr Trump became President-Elect of an USD18tn economy, a federal budget of USD3.8tn and set to become Commander in Chief of a 2m strong armed forces and the most powerful nuclear arsenal in the world. Furthermore, if true to his promises, he will be preoccupied with a complete overhaul of US taxation, trade and foreign policies (so we may still see him getting plenty of people ‘fired’).
Gold rallied, yen rallied, equities sold off across the board from US to Europe (though have since rebounded somewhat) to Mexico (though shares in CEMEX the Mexican concrete and materials company held up in anticipation of a large contract). Meanwhile the US dollar and US Treasuries showed mixed performance - the shorter end mostly holding steady but long end yields up 12 basis points. Markets are expected to remain unsettled as they evaluate, as best they can, US growth and inflation prospects in light of Trump’s still mystifying proposals. In his victory speech the President-Elect mentioned, 'It’s time for us to come together as one united people' and was a little more magnanimous than he was in the campaign. Whether he will also be more willing to listen to wise reprove from within his party remains to be seen.
In the scrimmage of last night/this morning Trump led in electoral college votes from early on but only really became the more likely candidate when he clinched Ohio (around 4am GMT) and then and North Carolina and Florida shortly after. Some hope spurred for Clinton when she unexpectedly won Nevada but by the time polling closed she still had to win 6 of the remaining 7 unannounced swing states with Pennsylvania, Wisconsin and Michigan all vital and too-close-to-call despite latest polls putting her 4-6 points ahead in all three. But at (6:40 GMT) The Associated Press called Pennsylvania for Trump effectively calling the presidency also. Wisconsin and more unexpected states followed suit giving the Republicans an estimated near 14 point margin in the electoral college to go with their also surprising 5 point/seat margin in the Senate.
What went wrong for the Democrats? Mrs. Clinton failed to keep the margin of support from Black and Latino voters only achieving 87% and 65% respectively; both 6 points lower than President Obama commanded in the last election; that and her zero charisma and the widespread disdain of the epistocracy epitomised by the Bush-Clinton gentry. What is more is that the appeal of the outsider and the emboldened power of the common voter has become a common trend. Something to bear in mind as the dust settles in America with France’s 2nd primaries next week and January 2017, the Italian referendum and Austrian election on the 4th December and France’s and Germany’s general elections next year. Though this is a difficult time to navigate for investors, for value seekers, such market uncertainty can create opportunities in securities that remain solid but have sold off in the broader market wake.