Does it really matter to global stock markets who wins the upcoming US election? Short term the answer is probably yes, as the markets are anticipating a Hillary Clinton victory. A Donald Trump victory could affect global stock markets much the same way that the Brexit vote did where there was a sharp sell-off lasting for just a few days.
A vote for Clinton is viewed as a vote for more of the last 8 years in the US. While a vote for Trump is viewed as a vote for change, but how much economic and political change can Donald Trump actually implement and how quickly?
The US political system is designed to spread out power and changes are usually more difficult to achieve than one anticipates and it takes longer than expected. So the US election could cause some short-term stock market volatility but mid to long-term it is less of a factor than global economic growth, interest and inflation rate trends.
At present global economic growth appears stable and is showing signs of starting to trend up as commodity prices stabilize. Globally interest rates will remain low but further interest rate declines should be limited. Concerning inflation most countries are still having trouble achieving their inflation rate target of around 2% especially in developed countries.
In summary we should continue to see moderate global economic and corporate earnings growth, with inflation and interest rates remaining low. With this type of scenario global stock markets should trend higher over the next 6 to 12 months whether Hillary or Donald are the future US president.
As always please contact me if you have any questions or comments. I can be reached at 780 944 2690 or b.achtymichuk@holliswealth.com.