Discussion about financial market on WSJ

WSJ article Guns Down, Bricks Up; What’s Moving in Markets on Donald Trump’s Win (11/10) details Trumps effect on markets.

The election of Donald Trump for president has had wide spread effects across the markets, the peso, rand and ringgit sunk, but banks shares rallied.

Winners of election were banks and construction-related stocks.

Shares of banks rallied on hopes that Mr. Trump’s administration would lighten the sector’s regulatory load. Shares from Bank of America & Deutsche Bank gained on Wednesday and Thursday with the Nasdaq Bank Index up more than 7% since the election.

Construction-related stocks soared on Thursday in the U.S. and Europe on bets on Mr. Trump’s promise of infrastructure investment. Steel providers rose, with producer ArcelorMittal up more than 10% since Tuesday.

However the election also bought losers, government bonds & emerging markets. Selling swept government-bond markets on expectations that the president-elect will enact a series of inflation-boosting fiscal policies would hurt these securities. The yield on the 10-year U.S. Treasury note had its largest one-day gain in more than three years Thursday.

Some developing markets also took a hit as investors expressed fears that Mr. Trump could act on his anti-global trade rhetoric. Which would hurt nations relying on exports to the developing world. Currencies such as the Mexican peso, Malaysian ringgit and South African rand drop as worries that Trump might tear up trade agreements and raise import tariffs. Already I have seen on the new that if Trump raise import tariffs China will cut U.S. import. I am interested and also worried if Mr. Trump has what it takes to run this country.

Another example: Dollar Hits 13-Year High As the title states, the U.S. dollar has been gaining strength recently and has “touched a 13-year high Wednesday, powered by rising U.S. bond yields and expectations of ramped up fiscal stimulus under the incoming presidential administration” (Iosebashvili). Since Mr. Trump won control of Congress, “some investors also believe that President-elect Donald Trump will have an easier time pushing forward policies that would stimulate the U.S. economy and boost the dollar further” (Iosebashvili). According to “ICE Dollar Index, which gauges the U.S. currency against a basket of six others, rose to 100.57 earlier in the session, its highest level since April 2003” (Iosebashvili). The piece goes on to state that Federal Funds Futures “showed that investors assigned a 90.6% likelihood that the Federal Reserve will increase rates in December” (Iosebashvili). The article closes by saying that these increases “in U.S. yields has also sucked money out of emerging markets, as investors shift money out of the comparatively risky currencies of developing countries into Treasurys” (Iosebashvili).

What do you think about the increasing strength of the dollar for the U.S. exports, will it significantly hurt U.S. companies that trade a lot abroad? How about imports, will they significantly increase even with the proposed increased tariff by Mr. Trump on imports?

Dollar Hits 13-Year High