On November 8th 2016 Republican Candidate Donald Trump and his supporters sent shockwaves through the world by completely slaughtering the United States of America’s (USA) election for their 45th Quadrennial President. The 2016 Presidential race was seen as one of the most bitter and venomous races of all time, and with either candidates winning, the financial market prepared itself for the worst.
As it turns out though, there was nothing to fear. Whilst we saw a slight decline in the market, in particular Australian and Chinese equities, overall the market remained quite strong – bouncing back to its original place a few days later. Trumps acceptance speech appeared to sooth the twitchy fingers that were poised over the ‘sell’ button of the savvy investor, and even though we saw a weaker Australian Dollar, this could make our exports more competitive.
Trump has ideas to rebuild America’s infrastructure and this could mean Australia is about to receive an injection of financial adrenaline. Iron Ore – our biggest export – will be in high demand once this policy is acted on in the foreseeable future. Whilst we are not directly selling our Iron Ore to the USA, the global demand for the commodity will escalate.
As with any market predictions, it is very hard to say what will happen next. Consequences, both adverse and favourable will affect world financial economics, and we must do the best we can to manage things as they come, taking into account our longstanding relationship with the United States of America.