We are hours away before voters in United States of America elect their 45th president. Will that be a 69-year-old tech savvy Hillary Clinton or 70-year-old verbal diarrhoea Donald Trump? The stage will be decorated on 9th November, Wednesday for the most powerful person on the planet to give the winning speech. Since, 1950, seven democrat nominees have managed to win the Presidential election while the number of Republican presidents USA has seen is nine. Last Republican president I remember was George Bush junior- for eight years! Not sure how good a president he was but sure was a good athlete. He ducked the shoe twice, I mean that was some serious reflex display.
My point here, the chances of getting a Republican president is higher or at least equal. And I believe it should be, because both Democrats and Republicans had leaders in the past who peed on democracy- for eight years consecutively thinking it was cool.
But let bygones be bygones, time passes, one thing about this year was the speed at which it passed. It feels like yesterday that i had received the 2016 calendar and before I could plan the year, it’s gone! Did someone just spin the earth like sometimes we spin the globe and leave. Imagine the imaginary people in imaginary states. Well! this year witnessed Rise of ISIS, earthquakes in Italy, interest rate hike a month before the new year, Brexit, China meltdown, crude oil supply glut and Presidential vote could be the last major event before 2017 knocks the door.
My office is decorated with USA national flags, slogans which read “America in dump, we need Trump” and “We need Hillary”. It is like a festival which the whole world celebrates but why? USA is no great power; they certainly have the biggest army and this NATO caring nature. However, they always involve the rest of the world with them. There is always some retard Joffery on the iron throne who is set loose with nuclear codes. The whole world watches the elections not because they care. They do, about their own well-being and besides, we got to see what has been in the media for so long.
Without any doubt this is the biggest circus of the financial markets with the clowns of their own dressed as donkey and elephants. From last one week, I have been conducting seminars on the impact of US Elections on the global markets. Secretary Clinton and Donald Trump meanwhile have been conducting ethical wars and enquiries against each other.
The countdown has begun for voters to get out and vote which means I am typing with the lightning speed of zillion words per minute to inform you about the how your investment strategy could get affected once the results are declared.
Impact on Gold
Gold has mostly given positive returns during the election years. May be that is because investors get spooked during the election season. The price goes up during uncertainty which now has become the middle name of Donald Trump. So, if American voters elect Trump for the chair then gold might become a precious metal again after all. A democrat president would not create much hype though.
Impact on Crude Oil
Leonardo Di Caprio received his first Oscar and said, climate change was real. Trump said that climate change was a hoax made in china. But the climate change has been discussed for a very long time. If it was hoax by China, then it would have faded out by now- come on! Its CHINA MADE. Hillary Clinton speaks about saving the non-renewable sources. She intends to save the energy sources whereas Republican believes that America should drill more oil and gain and should not rely on anyone else. Crude oil price might go up if Hillary Clinton comes as a president and vice versa. We cannot neglect the never-ending saga of OPEC meet which will take place in the last week of November.
Impact on Dollar and Emerging Market currencies
Donald Trump is a big zero when it comes to diplomacy and so is Hillary when it comes to Email Configuration The investors are assuming an unfriendly trade policy by Trump which could reduce the next exports for US. The capital outflow might be higher due to the above reason leading to a weak dollar.
However, this will not make situation for the emerging currencies any better. South African ZAR and Mexican peso along with several emerging market currencies might get weaker too. Let us say that it will be best for everyone if Clinton wins this one.
Impact on Equities
There have been various areas where both the parties have argued and suggested developmental reforms, Infrastructure is one of them. Both Trump and Clinton have their plans to build a better infrastructure to improve the economy. So, with their blessing, despite who takes the oath for president chair, it will be wise to invest in construction and infrastructure companies which have their maximum revenue coming from North America. Some stocks like Vulcan Materials (VMC), Quanta Services (PWR), Macquarie Infrastructure (MIC) along with some transportation stocks like FedEx (FDX) and United Parcel Services (UPS).
Now it is time to see a bigger picture. Trump’s selection will most probably cause a market correction of 8 -10%. The defence sector will be in profit as he plans to increase the defence budget. So, we should look forward to some defence companies like Lockheed Martin Corp (LMT), ELBIT Systems Ltd (ESLT), Raytheon Co (RTN) and General Dynamic Corps (GD)
Hillary Clinton on the other hand plans to regulate the drug prices and level them. This is not a good news for pharma sector. But the overall equities should be bullish if Hillary Clinton comes as president.
Comments from the Joker.
There is no place for logic in 2016, so let us welcome Donald Trump with open arms if American voters elect him. We already witnessed a referendum which was more a blunderum and now this race between donkey and elephants. Let us try to keep our investment strategy more of a day like and short-term. Invest your money in infrastructure stocks and transportation ETFs. The exposure to currencies such as dollar, pound and Euro should be limited and managed with a stop loss.
The rate hike in US is due so the new government (republican) might amend the fed policies to. This is going to be fun now, we need to be very careful with the open positions because America is on the verge of choosing between a Civil War and A World War.