2016 will be seen to have been a year where the old predictabilities were firmly moved aside, the people are voting for change on both sides of the Atlantic. The US electorate has voted in Tycoon Trump to the most powerful political position in the world and the markets are responding to what can realistically be termed a globally seismic political event.
With the tremors in the market still being felt since the Brexit vote in June, the ‘quake’ across the pond this week saw the S&P Futures Index suspended after a move of 5%, which is extraordinary in itself as it has only moved more than 2% twice in the last 58 years post election.
The Dollar has fallen against all major currencies and the Mexican Peso dropped nearly 12% over election night, whilst the ultimate safe haven currency the Swiss Franc has seen gains, along with the Japanese Yen.
Gold also jumped 3.3% as the election results came in, its largest rise since the Brexit vote, and other tangible, alternative assets such as fine wine will also offer capital refuge in these uncertain times. US investors have had the benefit of buying UK held fine wine cheaply in recent months as a result of the weaker £, we may now see a geographical rebound in the market.
Rumour also has it that Canada’s immigration website has crashed on the 10th and this is only the start! Certainly global economic and political focus has shifted from Brexit to a Trumped US this week and the US position somehow seems even more challenging to comprehend!
But one thing is for sure, the current climate of uncertainty has just had another hurricane pass through and with President Elect Trump taking up office in January, Prime Minister May still pushing for Article 50 in March, (despite the recent High Court ruling), French and German elections in 2017, we aren’t going to see Certainty any time soon. Time to enjoy some fine wine!