Donald Trump, president of the United States - January 22, 2017
After his inauguration on Friday, Donald Trump officially became the 45th president of the United States. His election came as a shock to many, and as we wrote before, his presidency may bring some surprises. But now, we just can’t know exactly what he will and will not do. At least, we have some clues based on his own words.
We already wrote about some of Trump’s ideas of a great America, namely softened up banking regulations, spending more on infrastructure and generally creating a pro fossil industry. These ideas already had some effects, and we can expect them to go further. Stocks for example are expected to keep flying, while revved up oil production may balance the OPEC agreement of late 2016.
In the meanwhile, tech companies may have a harder time as their stocks started to fall right after Trump’s win. Another important thing for the Trump cabinet might be to force companies with huge amounts of money abroad to bring back these sums. But for Trump, it’s not only about money, it’s also about production. One of his ideas was to put a 35% tariff on cars and trucks imported from Mexico. This may hurt car companies planning to build new factories there. Ford already announced that they may bring back a part of their production to the US.
Trump is also against strong dollar, as he believes that it hurts their economy in the race against China. Strong dollar has been an important part of US’ fiscal policies since the Clinton-era, but this may change now as well.
But for Trump it’s not only about internal affairs. He said he’s willing to meet Russian president Vladimir Putin and he already said he trusts him until he is acting against this trust. He also said that (after a period of keeping them) he sees a chance to lift the sanctions which have been hurting the country for years. For this, Russia would have to agree on a nuclear reduction deal and must help in the fight against terrorism.
And although Trump had some harsh words about China, he seems to be friendly at other times. He speaks about how the “One China” policy is under negotiations yet he meets with the head of Alibaba (the biggest online retailer of China) in a hope to help American companies sell their products in China through the site. Trump believes that this may create 1 million US jobs and Business Insider believes he may be right.
Trump won the elections months ago but there are still lots of questions about his real plans. Sometimes it’s hard to tell what he means and what’s only for the campaign: he attacked Obamacare severely but right after meeting the former president, he said that he may keep parts of it.
Other countries also prepare for Trump in the meanwhile. Chinese President Xi Jinping for example said on the World Economic Forum in Davos that he believes in free trade and globalization. Many believe that with this, China aspires for a greater global role and shows that the eastern country is against Trump’s protectionist ideas.
Altogether, in a situation like this, it’s still the best idea to keep the diversified long-term investments as they tend to be the most stable investments.
Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving high returns on their investments.