Election stock market bounces back
By LANDON THOMAS Jr. After a sharp sell-off overnight in Asia, markets staged a recovery on Wednesday as investors shook off the shock of a Donald J. Trump presidency and began to focus on whether his mix of policies could spur a still-fragile global economic recovery. The major market indicators ended the day up more than 1 percent. By their nature, markets are wired to look beyond the moment and into the future.
In that regard, the bounce-back in stocks reflects the bet being made by many investors that Mr. To that end, stocks that would benefit from more robust economic growth, like banks and companies tied to infrastructure and transportation, were in demand on Wednesday.
Shares of Bank of America closed up 5. The equipment rental company United Rentals ended up 17 percent. More broadly, however, market experts said that Mr.
If the baton is passed toward fiscal policy, that would mean higher inflation and lead to a rotation toward cyclical stocks such as financials.
For quite some time now, economists have been warning that the reliance of governments in the United States and elsewhere on central banks to energize economies via zero interest-rate policies and buying back securities was creating an uneven recovery by bolstering the housing markets in New York, London and San Francisco while real economies lagged.
Trump began to solidify his path to the presidency on Tuesday night, international markets fell sharply. Wall Street was expected to react similarly, but was up on Wednesday.
Increased government spending on highways, bridges and roads may well provide a lift to the broader economy, and tax cuts and looser regulations will be cheered by the financial markets. But there are downsides to these approaches, including increased deficits and levels of debt. Moreover, market analysts wonder how Mr. Trump will balance these policies, which are mostly positive for financial markets, with his promises to increase trade barriers on goods from Mexico and China.
The worry is that Mr. Trump would follow through on his promise to raise tariffs on China and Mexico.
Stocks greet Trump era with a bounce - Jan. 20,
The Mexican peso was down about 8 percent against the dollar and the Chinese renminbi continued a recent trend of weakness, suggesting, some traders said, that China might be pushing the currency lower to give exports an extra lift before Mr.
Among the more popular was iShares biotechnology fund, which soared 9 percent on the hope of fewer regulations for pharmaceutical companies under Mr. On Wednesday, the benchmark S. The Nasdaq composite index also ended up 1. In the weeks leading up to the election, a noticeable trend has been the slow but persistent increase in the interest rates of government bonds, many of which have been in negative territory for some time as investors sought safety in these securities.
View all New York Times newsletters. The sell-off in Treasury securities on Wednesday was drastic, pushing the yield, which moves in the opposite direction from the price, on the benchmark year note past 2 percent for the first time since January.
The yield, which touched a low of 1. And similar bonds issued by Japan and Germany , which this year began offering negative yields, are creeping toward positive territory. Analysts have said that these moves reflect a growing willingness of politicians around the world to loosen their fiscal belts to fight long-term stagnation.
Last week, the former United States Treasury secretary Lawrence H. Summers made the case, in a speech at the International Monetary Fund, that with rates at historically low levels and with the increasing chances of the economy entering a recession in the coming years, more government spending is desperately needed.
Governments around the world that are sitting on large piles of cash, like Germany, are facing similar pressures to take advantage of low rates to borrow and spend to stimulate a more vigorous level of growth. While such policies would also increase debt levels, economists who support Mr. No matter what comes next, the initial reaction Tuesday into Wednesday was shock.
As the realization worked its way around the planet that Mr. Trump would become the next president of the United States, global investors tried to make sense of the financial and economic implications, putting markets on edge.
How the Markets Responded to Trump's Victory - The Atlantic
American stocks were higher, a respite from the wild ride in Europe and Asia. But confusion showed no signs of abating, with investors awaiting the articulation of Mr. Global investors initially reacted as if the world had caught fire. They yanked their money from the marketplace in an unrestrained bout of selling reminiscent of the outbreak of war.
Investors sold stocks — first in Asia, and then in Europe. They sold oil and the Mexican peso, pushing it to a record low. They even sold the United States dollar, which nearly always functions as a refuge in times of chaos.
Yet hours later, the dollar rallied, oil prices recovered and even the Mexican peso came off its lows. Times reporters provided real-time analysis of Donald J. A version of this article appears in print on November 10, , on Page B1 of the New York edition with the headline: Initially Shaken, Shares Recover.
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Stock markets in Europe and the US bounce back after sell-off - BBC News
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You are already subscribed to this email. Neil Gough, Peter S. Goodman and Chad Bray contributed reporting.
Stocks bounce back after Trump win causes market chaos - NY Daily News
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