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Tuesday, November 8, 2016

US ELECTION - How To deal With It

As the US presidency voting day draws near, the huge rally in US market yesterday is pricing in a Clinton victory. Tomorrow we in Asia has an advantage, we will get to react to the Election results before the European and US market is open. Results from State to State should start streaming in from 0600 local time, the earliest time to know who wins is about1200 noon. If Clinton wins as expected, global markets lead by US futures will rally. This blog will be taking advantage of the `Sell On News’ strategy to short into the weakest indices and the weakest stock, this blog will also consider buying Gold and Gold miner stock into dip.

After a relieve rally, market will begin to watch the Fed closely. With US corporate balance sheets are leveraged significantly, with the debt-to-equity ratio again reaching the GFC peak , the Fed tightening scare will return.

 A tightening action could `Tanked,  the US market by 10-15%, as seen during the 2015 rate hike.

Meanwhile both candidates have common plan to spend on infrastructure and defence, they differ significantly beyond that. Trump presidency , would be good for gold and oil stocks, and benefit biotech plays that are under pressure from Hillary’s stance on drug pricing. Cutting repatriation taxes would also help companies such as Apple to bring cash back onshore and reward shareholders. On the other hand, a Hillary win would benefit consumers companies like staples, as she is looking to raise minimum wages.
All posts and charts are for educational and illustration purposes only

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