Bags of money

The U.S. stock market appeared ready to fall off a cliff late Tuesday when it became obvious that Republican Donald Trump would win the White House, with futures trading off some 900 points at one point.

But the fears of catastrophe evaporated by Wednesday morning, when the markets immediately moved into positive territory and by later in the day the Dow was challenging its 18,636 all-time high.

The Dow finished up 257 at 18,589.

“This is hardly the freakout many anticipated,” reported CNN. “Market strategists said a lack of a panic is due in part to Trump’s victory speech, which raised hopes that he will focus on policies that can help the economy and not follow through on some of his extreme campaign positions.”

Art Hogan, a strategist at Wunderlich Securities, told CNN: “The rhetoric that was talked about on the campaign trail was pretty scary. The nationalism and protectionism…. But there’s a big difference between what you say campaigning and what you do as president.’

CNBC said the Dow surged after opening higher in the morning, soaring some 250 points or more in the afternoon.

“The S&P 500 traded 1 percent higher after falling initially, with financials advancing 4 percent to lead advancers,” the report said, quoting John Stadtler of the financial services company PwC. “Within financial services, there is a guarded view that there may be less regulation [under Trump] than under a Clinton presidency.”

The world markets were on edge, however, with Asian stocks falling, and a 5 percent decline in Japan’s Nikkei 225. European stocks dropped then rebounded mostly.

Nick Adams’ book, “The American Boomerang: How The World’s Greatest Turnaround Nation Will Do It Again,” is endorsed by the likes of Dr. Ben Carson, Glenn Beck, Dick Morris, Gov. Mike Huckabee and Dennis Prager

“This is a bit like Brexit,” Ed Yardeni of Yardeni Research told CNN. “The polls indicated a victory for the status quo. Instead, the vote came out with a radical alternative scenario.”

Scott Clemons of Brown Brothers Harriman agreed, telling CNBC: “We had a trial run in June with the Brexit vote. Like with Brexit, investors and traders are realizing that this is a process, not an event. What you’re seeing right now is a pretty predicable repositioning of portfolios.”

Financial markets like stability and Hillary Clinton as a Democratic candidate was viewed as the status quo, someone who would not make major changes. Donald Trump, however, had promised huge changes in a number of areas of policy and practice, and the markets were reacting on Tuesday to his victory, even though he will not be sworn into office until January.

Reported CNBC: “Trump shocked the world by beating Clinton in the race for the White House. Trump’s success was only part of a larger, crushing victory for the Republican Party, which retained the House and appeared poised to maintain Senate control.”

The markets, however, “had originally priced in a victory for the former secretary of state, along with the GOP retaining control of the House while Democrats obtained a slight majority in the Sante.”

The report explained that the results “led traders and money managers to initially take a more risk-averse approach, sending traditional safe-havens like gold through the roof.”

“Gold futures for December delivery traded as high as $1,338.30 per ounce, before erasing gains to settle at $1,273.50.”

The report said Trump’s victory is impacting trade, taxes and foreign policy, and “puts into the question the likelihood of a Federal Reserve rate hike” coming.

That Fed has kept interest rates artificially low, at or near zero, for much of Obama’s term in the White House to try to help his economy along, without significant results.

“The market’s initial response to the probability of a Trump win was, predictably enough, one of shock and fear as the prices of traditionally risky assets tumbled and perceived safe havens rose. However the increased prospect of tax cuts and a generally pro-growth set of policies from him, aided and abetted by the Republican clean sweep of congress, has seen some of this initial reaction begin to reverse,” James Athey of Aberdeen Asset Management said in the CNBC report.

NBC reported among the strongest performers were “healthcare stocks,” based on Trump’s pledge to repeal Obamacare.

“When you look at Trump’s plans, they are actually pro-market. Increased fiscal spending, that’s great for infrastructure and defense names, less regulation that helps banks, less involvement in healthcare –things that worried the market before,” Nadia Lovell of JPMorgan Private Bank told NBC.

Nick Adams’ book, “The American Boomerang: How The World’s Greatest Turnaround Nation Will Do It Again,” is endorsed by the likes of Dr. Ben Carson, Glenn Beck, Dick Morris, Gov. Mike Huckabee and Dennis Prager

 

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