16th November 2016, GTC Advisors – The US Election Aftermath
GTC Advisors is a 100% Independent, privately owned Boutique Investment Advisory Firm offering services to retail, corporate and high net worth individuals.
GENEVA, Switzerland - Nov. 16, 2016 - PRLog -- It has been just over a week since the US voted and placed Donald Trump as President Elect. Although he won't take office until January 2017, the effects on the markets globally have been significant.
Leading up to the election it appeared that Wall Street was expecting a Clinton victory and it wasn't until polling data started to filter through that the possibilities of a Trump victory started to become more of a reality.
Leading up to the final hour's markets globally reacted with expected volatility. Equities saw the most movement with significant capital being pulled out of the markets in to safe havens such as Gold, Silver and Foreign Bonds.
However, after the result was confirmed and the markets knew that it was facing a Trump Presidency there were huge capital inflows to key sectors which stood to benefit. Sectors such as Pharmaceuticals, Infrastructure and Defense all bolstered as cash moved from commodities such as Gold and Silver to the equities markets.
With Trump vowing to spend over $500 Billion rebuilding infrastructure, Copper rose over 11% after the results and Iron Ore rose to a 2 year high as steel output in China increased to match the potential increase in demand.
Gold which was benefitting from its Safe Haven status saw its worst run in 3 years due ot the prospect of a possible rate increase by the Fed as Trump looks to strengthen the Dollar. Gold is now close to a 5-month low at $1,228.90 with Silver back down to $17.18. The USD which was already showing signs of strength continued to rise against a basket of currencies. The Bloomberg Dollar Index rose for 5 straight days and the Euro fell for a sixth session, making it the longest run of declines for the currency in 6 months. The USD/EUR is now at 1.0730.
After agreeing a reduction in supply, OPEC saw the PPB drop again to an 8-week low due to the Dollar rise and an increase in Iranian production. Just last month OPEC confirmed the agreement between its members, Russia and Iran to reduce output in an effort to get the PPB back up above $50 - $55 per barrel.
With Trumps commitments to double digit growth and infrastructure rebuilding equities have outperformed bonds. The potential for the FED to increase rates early next year now seems inevitable and there are a lot of repositioning going on in the markets as investors look to see who will benefit from President Trumps economic policies.
We expect the last two months of 2016 to be very good for equities. There is very little chance there will be a FED rate hike in December and this will pave the way for 2017 to see 3 or 4 rate increases throughout the course of the year, which many analysts are forecasting.
GTC Advisors prides itself in offering a truly global financial service. Our ability to provide a wide range of independent financial advice incorporating multiple sectors, markets and demographics is key to retaining clients and nurturing new relationships. It is our mission to support our clients in every aspect of their financial strategy that sets us apart from the competition.
Contact an advisor today for a free consultation at www.gtc-advisors.com
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