Trump poised for White House return

With all signs pointing to a Donald Trump win, we expect many of his populist policies to cause ripples, even though markets were largely priced for this outcome. How might investors navigate the election result?

Key takeaways

* Donald Trump’s focus on lower corporate taxes and further de-regulation should favour US companies, particularly smaller businesses with attractive equity market valuations. To a certain extent, tech firms may benefit from their loyalty to Mr Trump.
* While Republicans have likely won the Senate, a red sweep of Congress would enable him to push through tax cuts and higher spending – increasing the chances that credit markets are unsettled by unfunded fiscal largesse.
* We think a Trump victory could carry more geopolitical risk than a Kamala Harris win because his geopolitical strategy involves an unpredictable approach to both his allies and foes. Expect higher trade tariffs with China and potentially some European nations.
* Mr Trump’s likely tough stance on a range of issues ranging from trade to immigration may potentially boost the US dollar and gold. The impact on bond markets is more difficult to predict and we anticipate some volatility in equities until the results are finalised. If a Trump win is confirmed quickly, we can anticipate volatility to move lower as uncertainty is removed.