The morning after the election, we wrote that we expected the surprising victory by Donald Trump would likely result in increasing volatility for capital markets as investors absorbed unanticipated change and uncertainty with regards to the new administration.
While we can claim partial accuracy on this prediction (see Fixed Income and Emerging Markets), with a few exceptions global equity markets have moved higher in the aftermath of the election as markets have focused on the pro-growth aspects of a Trump presidency. Interestingly, the markets appear to be acting with great clarity with respect to the likely impact of anticipated policies coming out of Washington while we would argue that the outlook remains relatively opaque as the formation and implementation of the policy agenda continues to evolve. Our thoughts below address four policy areas with respect to the impact of potential policy shifts on the economy and financial markets.
