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Navigating a Trump Presidency

America has spoken and elected Donald Trump to be its next president. Although he won’t take office until 20 January 2025, initial market reaction has seen the US$ and Bitcoin soar, with the losers being Euro and Emerging Market currencies.

Unpicking the true effect of the new President’s stated aims will take some time and, as with any new administration, some may be subject to change as they are tested against real conditions. However, in the immediate aftermath of his victory the consensus is that policies such as lowering corporate taxes and rolling back regulation could lead to an initial boost in the US internal markets. However, this may come at the cost of an increase in US interest rates and inflation.

With a rise in international trade tariffs also in the new President’s sights, the picture is not as rosy for European and other stocks. However, we shouldn’t ignore the fact that, over the long-term, international trade tariff increases could also negatively impact US companies, in particular those which trade globally. Some commentators are also predicting that a more protectionist US economy could result in the European Central Bank and others cutting interest rates quicker than they might otherwise have done, thereby potentially benefitting non-US companies.

The volatility seen in the immediate aftermath of the election will gradually die down as markets drill down into and factor in the likely economic effects of a Trump Presidency. Our investment team will continue to review and discuss available research data in order to advise our clients on any changes which it may be prudent to consider. In the meantime, if you are looking for advice on pensions or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.