Markets not quite coming up Trumps
Though there’s been an initial market rise, the long-term prospects of a Trump presidency don’t look good
Hillary Clinton’s trouncing by larger-than-life Republican Donald Trump in the US presidential election caught everyone by surprise. Well, maybe not everyone. For Hlelo Giyose, First Avenue Investment Management CIO, a Trump victory was always on the cards. "There is no surprise [that] people who have been living under financial repression launched a comeback," says Giyose. "They were no longer prepared to tolerate it." Trump’s "Americans-first" stance resonated with the core US middle class, which has found itself getting nowhere for a quarter of a century. Reflecting this, median US household income adjusted for inflation peaked in 2007 and is now back at its 1989 level, according to the US Census Bureau. "Trump knows he must spend to satisfy his electorate," says Giyose. Trump intends to open the federal spending tap wide. For investors, it could make US domestic-orientated cyclical stocks the place to be, at least in the short to medium term. Infrastructure spending of as much a...
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