Dollar falls and shares surge as markets brace for gridlock after US elections – business live
Financial experts believe Donald Trump’s plans for infrastructure spending and tax cuts will be “curtailed”, now the Democrats control the House of Representatives
- Introduction: US dollar hit by midterm election results
- But shares rally as Trump has his wings clipped
- Live blog: Midterm elections 2018 latest
- Full story: ‘Blue wave’ sweeps Democrats back to majority in House of Representatives
Aaron Anderson, senior vice-president for research at wealth manager Fisher Investments, argues that the prospect of political gridlock is actually good for shares.
Legislation was hardly flying through Congress before midterms. Now with Democrats controlling the House of Representatives, the GOP increasing its majority in the Senate and President Trump in the White House, it will be nearly impossible to pass anything remotely controversial.
That will drive many people crazy, but markets love it. We should now have a long stretch where political risks go way down, which should be good for stocks.”
Shares are roaring ahead in early trading in Europe, as investors react to the midterm election results.
In London the FTSE 100 has gained 80 points, or over 1%, to 7,119.
Having the president’s wings clipped by losing control of the House is helpful for avoiding the most obvious “end of cycle policy mistakes” – which in our view is pumping more deficit spending and protectionism into the economy, forcing the Fed to tighten at a faster rate.
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Author: Graeme Wearden