“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.”
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.
