“European stocks rose on Thursday following extraordinary gains in Asia and the United States, as exuberance shot through markets and reversed initial dives in reaction to Donald Trump’s U.S. presidential victory,” Abhinav Ramnarayan reports for Reuters. “Investors focused on Trump’s priorities – including tax cuts and higher infrastructure and defense spending, along with bank deregulation – and set aside for the moment longer-term worries about whether he will slap punitive tariffs on Chinese and Mexican exports, risking a global trade war.”
“European stocks hit a two-week high, with the pan-European STOXX 600 index up 1.3 percent in early dealings, and ‘safe haven’ government bonds sold off after Trump suggested he would spend billions on infrastructure,” Ramnarayan reports. “Investors saw signs that Trump will ditch the budget austerity policies that Western governments have pursued since the 2008 global financial crisis after he takes over in January. ‘Trump’s speech following the victory was hugely influential in yesterday’s sudden U-turn, as he focused more on unity and the need to spend to get the economy growing again. These policies combined with his desire to deregulate and lower taxes are all very market-friendly,’ said Craig Erlam, senior market analyst at OANDA.”
“In a remarkable session for Japanese shares, the Nikkei jumped 7 percent at one point after sinking 5 percent on Wednesday. Gains in Europe, where markets had already started to recover on Wednesday, were more modest. Britain’s FTSE was up 0.95 percent, Germany’s DAX rose 1.12 percent and France’s CAC was up 1.06 percent by 0415 ET,” Ramnarayan reports. “Copper rose to a near 16-month high on expectations that a Trump presidency could unleash a flood of infrastructure spending. [MET/L] Iron ore surged to its highest since January 2015. Brent crude oil added to overnight gains made on the post-U.S. election surge in global markets, rising 0.22 percent to $46.46 a barrel.”
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“The stock market rally continues for a second day after Donald Trump beat Hillary Clinton, a reaction few expected. The Dow opened at a record high,” Paul R. La Monica reports for CNN. “Stocks have historically gone down the day after Election Day. The market only rallied on 6 of the past 21 post-Election Days. Stocks plunged 5.3% in 2008 after Barack Obama was elected. Of course, those were unusually tumultuous times for the market and economy. But the S&P 500 also fell 2.4% after he beat Mitt Romney in 2012.”
“So can stocks keep rallying as Trump starts to make Cabinet picks and give more details about his economic and foreign policies?” La Monica reports. “Perhaps. Despite his mercurial nature during this long, nasty election cycle, Trump has already won raves from investors for his more measured acceptance speech.”
“Shares of many banks, drugmakers, oil companies and construction firms all rallied sharply Wednesday and were set to rise Thursday as well. Investors now seem to be betting that Trump, combined with a Republican-controlled House and Senate, may look to unwind some of the regulations on financial services companies put into place during the Obama administration,” La Monica reports. “There are also hopes that Trump will propose plans to boost infrastructure spending, drill more for oil and also push back on some of the attacks against drug and biotech companies for price hikes on key medications.”
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MacDailyNews Take: That’s a big league reversal from the initial shock that some markets experienced as it dawned on many observers that Trump would win the U.S. presidency.
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