Trump’s Surprise Victory And Its Effects On The Financial Markets

November 12, 2016

In the News, The United States of America just concluded the elections for the 45th president of the great superpower. With a clean sweep of both the House and the Senate, Donald Trump, the republican candidate has been elected as the President, much to the surprise of the whole world. While America was in the last leg of these elections, the financial markets world over had begun to feel ripples of change, but with his surprise win, a lot of the financial services companies were left rattled and in grave uncertainties. While the whole world was expecting an entirely different outcome, the way things progressed, it seemed like a recap of the whole Brexit situation, which left a lot of people from both finance and non-finance backgrounds equally shocked. While there was uproar in certain places, for instance the Time Warner Company, which saw a fall of 1.45% drop in its shares, which was incidentally threatened by Trump for concentrating the power in the hands of very few people.

financial-effect
The world news is strife with reports of a number of people losing a lot of money across borders. The Global bond investors have recorded a loss of about $337 billion, which is close to 22 lakh crores of rupees. The global value of the bonds’ market slid by $692 billion, which is over 46 lakh crores of rupees over the last three days. Presently there seems to be a lot of uproar and unrest, both in the country of America as well as on the global financial front. But there are a lot of people who believe that once things calm down a bit, there are very high chances of the financial companies, of accepting the stance of the President elect. Although the Trump campaign has been extremely devoid of any details on financial policy except for his claims and promises to freeze all new regulations, in terms of certain divisions between commercial banking and investment banking.

As Republicans have literally taken it all, in terms of both the Senate and the House, there are concrete chances of a lot of changes to the Dodd-Frank Act, which will the restructuring of the Consumer Financial Protection Bureau and raising the bank regulation over its current $50 billion level of assets. There are also theories, which state that Trump can turn to a different approach, which has been put forth by the chairman of the House Financial Services Committee Chairman, Jeb Hensarling, which basically deal with a bill, which extensively talks about the various segments of the Dodd-Frank and suggests alternative measures. Trump and his criticisms for the Wall Street are likely to support the deregulation of the industry and might prove to be a greater challenge for bigger firms. Another potential financial blow to the financial institutions, could be Hillary’s loss in the strong democratic states, which in turn give more courage to the progressive wing of the party. One thing is certain, that the legislature would not be able to break the giants in the banking sector apart, but would definitely have a lot of negative headlines for the biggest banks in the country. The markets still face a tumultuous situation as everyone gears to wait for the time when Trump, officially begins his presidency.


This, and a lot more, is one of the topics we discuss in our The Foreign Exchange and International Trade Prodegree program in India. You can also watch the video what our experts says about this video.

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