Donald J. Trump has been elected the 45th President of the United States of America and the Republican Party has retained control of both the House and the Senate.
After an initial sharp selloff in the futures market overnight, the equity markets have mostly recovered although we may continue to see volatility as investors are trying to evaluate the difference between Trump's campaign platform and Trump's presidential policies.
European markets also followed the resiliency of the US market and overcame earlier losses to trade even in the positive territory.
Potential impact on Canadian Market
In Canada, the S&P/TSX Composite opened relatively unchanged as concerns around global trade appeared to be largely offset for now by better prospects for the Oil & Gas and the Gold sector. Gold price saw an initial increase based on a desire for safe haven and this may continue if the market remains volatile. The initial impact on the Canadian dollar has been moderate.
US Fed must strike a balance
With a looser fiscal policy, the US Federal Reserve will have to balance the need to control inflation pressure from more fiscal spending with potential volatility and its impact on the economy. Trump struck a conciliatory tone in his acceptance speech, which may provide for a continuation of The Fed's mandate and policies.
Not the time to invest with emotions
While initial reactions may be emotionally charged, we strongly recommend staying the course. The next few months will likely determine the longer-term global impact of this significant change in US politics.
You can rest assured that the portfolio managers will continue to monitor the situation and potential impacts closely to assess the best course of action to preserve and grow the assets of their investors. While we may see volatility, we are also likely to see interesting investing opportunities for active managers. We truly value the trust and confidence you have placed in our Spectrum team and want to be sure that we are actively addressing any concerns you may have. Please be sure to reach out to us whenever a question or situation arises and we will help in any way we can.