“Perhaps we should learn some lessons from the Brexit vote in run-up to the elections,” he said. “After Brexit, markets took a dive and volatility increased for two weeks, but markets have recovered since. Therefore, I believe that markets will cope with whatever outcome of the elections. If you are long-term investor, you might as well look through it and ignore all the election noise.”
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It seems, however, that the audience hasn’t yet learnt Wehner’s lessons. Two thirds of Swedish fund selectors believe a Trump win will negatively impact global markets, while only a third think it won’t make a difference. And indeed, only one attendee believes President Trump will actually beneficial to equity and bond markets.
A sure thing, however, is that a Trump presidency would lead to a very high degree of policy uncertainty in the US. This would give the Fed a very good reason to hold off from hiking rates for the foreseeable future, and pursue an accommodative policy, weakening the dollar. This uncertainty could also have a negative impact on growth and investment. In short, a Trump presidency would likely mean the US will be very much in the same boat as Europe.