U.S. markets rally after fears over Trump

Nov 10, 2016 (LBO) – US share markets rose on Wednesday shrugging off concerns that a Donald Trump presidential victory was bad for Wall Street.

The Dow Jones rallied 1.4 percent, S&P 500 1.1 percent and Nasdaq rose 1.1 percent, after the pre-open futures market initially forecast a sell-off of as much as 4 percent following Trump’s victory.

Money initially flowed into safe haven stocks, gold and currencies including the yen, but as the day went on, global markets recovered, BBC reported.

In London the FTSE 100 index dropped 2 percent at the start of trading before recovering to end the day 1 percent up.

The biggest winners on the FTSE 100 were pharmaceutical firms, defence and mining companies, while banks and retailers were among the losers.

“What you’re seeing is healthcare companies which had been threatened by some of Hillary Clinton’s policies actually recovering quite strongly,” Ben Ritchie, senior fund manager at Aberdeen Asset Management, told the BBC.

Arms makers stand to gain from Mr Trump’s proposals to increase defence spending, while relaxed regulations could help the oil and gas sector.

Gold initially jumped 5 percent – the biggest one-day rise since after the UK’s Brexit vote – before falling back to more modest gains.

The 10-year note was yielding 2.07 percent, the highest level since January, and the 30-year was at 2.86 — the biggest one day jump in the 10-year yield since Aug 11, 2011. Fed fund futures saw a 81 percent probability of a 50 to 75 basis point rate hike in December.

Carl Icahn told Bloomberg that he had pumped one billion dollars into the market after futures predicted a sell off, as his position was that Trump was good for business.

Concerns about the Trump presidency on the Mexican economy saw its currency, the peso, fall more than 13 percent overnight against the dollar to its lowest level in two decades. It has since pulled that back slightly to an 8 percent loss.