Why Did the Market Crash When Trump Was Elected?
As soon it begun to appear Trump would win, stock and futures markets around the globe begun to tank. Many are chalking it to surprise--the similarly surprising Brexit vote earlier this year caused a two-day rout in the equities market that reverberated in a decline of stock prices everywhere, for a short while. But America is more important and there's little chance Trump will be fading away from the headlines soon. Here's a few things going up and down right now:
Trading on stock futures on the S&P 500 halted in the middle of election result reporting, as a 5% drop triggers an automatic shutdown of trade. Why? "Many investors view Mrs. Clinton as the "status quo" presidential candidate," The Wall Street Journal reported. Trump, for obvious reasons, is considered volatile and his lack of experience on the political stages leaves investors around the world little to cling on to.
The Mexican peso slowly begun tocrash as it appeared Trump would overtake Clinton's predicted lead in the polls. Throughout the election, Trump's oft-repeated threat to "tear apart" NAFTA and other trade agreements between the U.S. and Mexico have caused investment in the Peso to often mirror Trump's chances to win. On the other hand, both the yen and other currencies surged quickly after the election results poured in. Why? Unsure about what's happening over here, people are buying up currency in countries that are historically and politically very safe, like the yen, the Swiss franc, and the Australian dollar.
Trump-friendly Industries Soar
On the other hand, shares in major mining companies, pharmaceuticals groups, and defense firms are rocketing upward. Throughout the campaign, Clinton has promised to reform the Affordable Care Act by pressuring pharmaceutical companies to lower their prices in response to criticisms of how much money it was costing small businesses. Since Trump plans on scrapping it altogether, drugs makers like Novo Nordisk and GlaxoSmithKline canrest easy. Also on the up? Defense companies, excited by Trump's demands that other countries start "paying their share," arealso on the up.
Here's a great list of what stocks you'll want to buy in the wake of Trump's win!
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