Why an Elizabeth Warren presidency worries markets more than Donald Trump’s trade war
- Despite Trump’s erratic policymaking, investors have done well during his presidency. But uncertainties over a trade deal and Trump’s possible impeachment are a reminder that political risk will continue to unsettle markets whoever wins the election
Yet, just hours after the release of the bleak data, Wall Street’s three main stock market indices – the benchmark S&P 500, the Dow Jones Industrial Average and the technology-heavy Nasdaq Composite Index – simultaneously closed at record highs for the first time since mid-July.
For some time now, markets have been taking a less-pessimistic view of the state of the global economy, partly because of tentative signs that the slowdown is abating. However, the main catalyst for the recent improvement in sentiment is the very same factor responsible for many of the previous sell-offs: Trump’s erratic trade policy.
Once again, it is Trump’s unpredictability that has proved to be the key determinant of sentiment. While investors loathe uncertainty, the fact is they have not fared too badly under Trump. Since the former real estate mogul was elected president in November 2016, the S&P 500 has gained a whopping 47 per cent.