World markets recoup some losses, after initial reaction to Trum - WDRB 41 Louisville News

World markets recoup some losses, after initial reaction to Trump victory

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LOUISVILLE, Ky. (WDRB/AP) -- Conciliatory comments from U.S. President-elect Donald Trump in the aftermath of his stunning victory over Hillary Clinton helped global stock markets erase a large chunk of their earlier losses Wednesday.

"Think about the Brexit a few months ago. It's the unknown. It's the fear of the unknown, says Financial adviser Mark Lamkin of Lamkin Wealth Management. "The markets sold 6% and then when there was clarity the market came back. We're going to see the same thing with Trump"

Though uncertainty remains over Trump's trade, immigration and geopolitical policies, investors appeared somewhat soothed by his victory speech, in which he praised Clinton and urged Americans to "come together as one united people" after a deeply divisive campaign.

In Europe, Germany's DAX was down 0.7 percent at 10,408 while the FTSE 100 index of leading British shares was 0.1 percent lower at 6,838. U.S. stocks are expected to open lower, too, though by far less than earlier predicted. Dow futures are 1.7 percent lower at 17,974 while the broader S&P 500 futures were down 1.8 percent at 2,097.

As Trump gained the lead in the electoral vote count, investors became increasingly uneasy and share prices tumbled in Asia, which were open during the election results. Dow futures were down 4 percent at one point. However, by the time Trump was confirmed the winner and made his speech, financial markets had steadied.

The dollar also recouped some ground, while assets that many investors search out at times of uncertainty, such as gold and the Swiss franc, came off earlier highs. An ounce of gold was up 2.4 percent at $1,305 while the dollar was only 0.4 percent lower at 0.9734 Swiss franc.

One currency that remains heavily sold is the Mexican peso. It was down 8.5 percent as the prospect of a wall along the United States' southern border - a key campaigning point for Trump - has come one step closer to reality. Trump has insisted that Mexico will pay for the wall. Also potentially impacting the peso is Trump's threat to rip up trade deals like the North American Free Trade Agreement, a key plank in Mexico's economic strategy and growth.

Under the U.S. constitution, Trump doesn't formally take the reins of power until January but he will begin the transition to his presidency almost immediately. In the coming weeks, investors will be looking to see if he further tempers some of the rhetoric that polarized American opinion and often spooked investors in financial markets.

Trump's victory could make the U.S. Federal Reserve less likely to raise its key interest rate at its next meeting in mid-December - especially if financial markets remain under pressure. Some analysts are ruling it out entirely. Benefactors of Trumps presidency could include; defense contractors, energy companies, food producers, bio-tech firms and regional banks, according to Financial adviser Mark Lamkin of Lamkin Wealth Management. industries likely to be hurt under the Trump administration could include; big banks, healthcare, exporters, and railroads, according to Lamkin.

"My biggest fear, the tariffs. If starts traffiing the heck out of Mexico and China then that could lead to a global recession the markets will sell off big then," said Lamkin. "The big fear is he wants interest rates to rise quicker. If that happens then the bond markets will get hammered."

Another point of interest will center on the U.S.'s trade relations with China and its impact across Asia. Trump's victory has raised concerns that the U.S. and China might embark on a trade war of sorts and that protectionism around the world will grow. In Asia, Japan's Nikkei 225 stock index closed 5.4 percent lower, recouping some losses, at 16,251.54. Hong Kong's Hang Seng closed 2.2 percent lower to 22,415.19 while the main index in Shanghai fell 0.6 percent to 3,128.77.

South Korea's trade ministry held an emergency meeting to review prospects of U.S. trade policies after the presidential elections. Top officials from Japan's central bank and finance ministry met Wednesday to discuss how to cope with the gyrations in financial markets.

Lamkin Wealth Management
901 Lily Creek Road, Suite 102
Louisville, KY 40243
(502) 690-6764
www.lamkinwealth.com
                        
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member SIPC (sipc.org). For a list of states where Mark is registered to conduct business please visit www.lamkinwealth.com

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