Invest
Brexit-like rebound predicted after US election
The best result for the US election would simply be for it to end, with experts predicting a resurgence in markets regardless of the winner.
Brexit-like rebound predicted after US election
The best result for the US election would simply be for it to end, with experts predicting a resurgence in markets regardless of the winner.
Instreet Investment managing director George Lucas says that despite fears about a Trump presidency, such a scenario would not necessarily be dire in the long term.
“If Trump wins, the market is expecting a 5 per cent to 10 per cent sell off as a kneejerk reaction, but with a Brexit-style recovery afterwards,” Mr Lucas said.
“A Clinton win could see the US market easily recover the 3 per cent it has already lost, but this also depends on who wins the Senate and House.”
The important thing is that a result will end speculation about who will lead the US for the next four years, which should see markets recover from recent losses.
“The last couple of weeks have been miserable for Australian and global equities as participants feared a Trump win in the final countdown to the US presidential election. The S&P 500 has shed about 3 per cent over the past nine trading days, the ASX 200 has shed 4.6 per cent over the last two weeks, while the pan-European STOXX 600 index fell to its lowest point since early July,” Mr Lucas said.
“In Japan, the Nikkei 225 dropped 3.1 per cent last week, its worst drop in four months. Not helping the situation was a sell-off in oil and weak US employment data.”
AMP chief economist Shane Oliver also weighed in on the issue, saying a Trump presidency would be bad news for Australia.
“A Trump victory would likely trigger a further initial bout of ‘risk off’ with shares down by 5 per cent or so, both in the US and globally, and safe havens like bonds and gold rallying as investors fret particularly about his protectionist trade policies triggering a global trade war,” Mr Oliver said.
“Australian shares would be particularly vulnerable to this given our high trade exposure.”
However, Mr Oliver agreed that a recovery is likely following the result, whatever that may look like.
“Global and Australian shares rallied into the Brexit vote, whereas this time around they have already fallen 3-5 per cent over the last two weeks to price in maybe a 50 per cent chance of a Trump victory and are already technically oversold and primed for a rebound if the news is good or uncertainty is reduced,” he said.
With the two candidates polling closely, the result remains to close to call.
“This election is too close to call and the relatively high proportion of undecided voters, along with the historically high disapproval ratings for both candidates, means it could go either way. Clinton appears to hold a slim lead but it’s within a margin of error,” Mr Lucas said.
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more
Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more
Property
5 tips to unearth the next property hotspots
A property expert has bullishly claimed that property hotspots are a “complete myth” that almost guarantees buyers will pay top dollar, and has instead urged buyers to seek out the “warm spots...Read more
Property
Top 10 inland rural towns to invest in
While it’s become apparent that regional housing markets have stolen the spotlight, having outpaced their capital city counterparts in 2020, new research has shown that inland rural towns have also ...Read more
Property
Where to buy under $300k
A positively geared property with high capital growth potential does not necessarily need to carry an astronomical price tag, an expert has said, with new market entrants able to land a home for under...Read more
Property
‘Great Australian dream’ of owning a home lives on amid COVID
Most Australian investors and home buyers were largely undeterred by the events of 2020, remaining eager to push through with their investment plans, a new survey has found. ...Read more
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more
Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more
Property
5 tips to unearth the next property hotspots
A property expert has bullishly claimed that property hotspots are a “complete myth” that almost guarantees buyers will pay top dollar, and has instead urged buyers to seek out the “warm spots...Read more
Property
Top 10 inland rural towns to invest in
While it’s become apparent that regional housing markets have stolen the spotlight, having outpaced their capital city counterparts in 2020, new research has shown that inland rural towns have also ...Read more
Property
Where to buy under $300k
A positively geared property with high capital growth potential does not necessarily need to carry an astronomical price tag, an expert has said, with new market entrants able to land a home for under...Read more
Property
‘Great Australian dream’ of owning a home lives on amid COVID
Most Australian investors and home buyers were largely undeterred by the events of 2020, remaining eager to push through with their investment plans, a new survey has found. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
