Trump, Clinton and those Fickle Financial Markets

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Trump, Clinton and those Fickle Financial Markets

Trump, Clinton and those Fickle Financial Markets

The Market and Political View from Adam Jepsen, Founder, Financial Spreads.

- - Trump vs Clinton and the Fickle Financial Markets - -

A week ago I commented on how The Donald had been outmanoeuvring his Republican opponents and that Hillary Clinton should expect two more manoeuvres.

The last few votes are still being counted for Tuesday's key Indiana primary but the damage has been done.

Ted Cruz only garnered about 36% of the vote has now suspended his campaign.

The resilient Trump won 53% of the vote and almost every county.

- - - - Presumptive Nominee - - - -

Even Reince Priebus, Chairman of Republican National Committee has now tweeted "@realDonaldTrump will be presumptive @GOP nominee, we all need to unite and focus on defeating @HillaryClinton #NeverClinton".

@realDonaldTrump will be presumptive @GOP nominee

#NeverClinton is not the most positive message.

Judging by this and the Republican TV debates we can expect an ugly campaign.

Trump could thrive.

- - - - What Next for the Billionaire? - - - -

In recent weeks the presumptive nominee had been toning down his speeches. During a talk on foreign policy he even referred to "defending the border" rather than "building the wall".

I expect him to turn the rhetoric up a little between now and the Republican convention in July but he's unlikely to be too bombastic.

No doubt he will enjoy the unexpected respite from the gruelling Republican campaign.

Of course, he will continue his sniping at 'Crooked Hillary'.

- - - - The Character Assassination of 'Crooked Hillary' - - - -

The New Yorker understands the media's love of sound bites.

He has used this to full effect with Jeb "embarrassment to his family" Bush, "Little Marco" (Rubio) and "Lyin' Ted" (Cruz).

The problem for Hillary is that 'Emailgate' is her Achilles heel. The Donald will continue to push and question "Crooked Hillary".

Using her personal email for work as Secretary of State, deleting large volumes of emails and changing her story, will not help the former First Lady.

- - - - Clinton Would Rather Have Faced Cruz - - - -

Many of Ted Cruz's view were hard to swallow, even for Republicans. With Cruz it would have been easy for Clinton to occupy the centre ground.

However, many of Trump's views are far more inline with the traditional Democrat doctrine and that's why he got into such as mess over his views on Planned Parenthood.

Also, having been implausibly policy-lite during the Republican race, he won't be hampered by previous statements as he makes a dash for the centre ground.

- - - - Expect Fireworks in July - - - -

Once the New Yorker is the official Republican nominee then I expect a return to the extreme statements that have propelled him to date.

This will allow him to consolidate his supporter base.

It will also allow him to attract disgruntled Democrats, independents and the #NeverClinton-ers. Judging by the Bernie Sanders campaign there are many of the latter.

Trump's incendiary speeches are unpalatable to many.

However, we should remember that the 'anti-establishment, anti-immigration and pro-protectionism card' wins votes in many countries.

- - - - Trump in Hot Water or a Hot Tub? - - - -

No doubt the billionaire will land himself in hot water a good number of times between now and the Presidential election on 8 November.

Of course, for a man who gave the Miss Universe competition a new lease of life, he likes a hot tub.

Hot water doesn't seem to bother him or his supporters (although it will have his staffers working overtime on damage limitation).

- - - - Presidential Trump - - - -

When the race gets close, and I think it will, Trump will do what he's done well over the past few weeks. He will tone down the rhetoric.

He will tell everyone he can be presidential.

The electorate seems to have forgotten and/or forgiven many of the New Yorker's outrageous comments and handed him seven back-to-back primaries.

It also helps that Trump has said so many shocking things that this week's "We cannot allow China to Rape our country" speech has already been used as fish and chip paper.

- - - - The Financial Markets as Fickle as the Electorate - - - -

From a market point of view we may see a small negative reaction over the next day or so.

There may also be a small negative reaction at the July convention (assuming Trump is made the Republican nominee).

However, the financial markets are often as fickle as the electorate.

These movements are likely to be short-lived.

If the race between Hillary and Trump gets close then I would expect heavier selling and a risk-off market as we get closer to 8 November.

Wall Street would much rather have the known quantity of Hillary Clinton rather than a divisive person who's only been in politics for 10 months.

But the race will have to get closer than it currently is. The bookies have Hillary at 2/5 and Donald at 11/4 to be President.

For now, unless there are wider market moves, if the markets sell-off on the back of a Trump story, it's not difficult to imagine the story being quickly forgotten.

The above is the personal view of Adam Jepsen, Founder, Financial Spreads.

By Adam Jepsen, 4 May 2016

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