Investor reaction to Donald Trump's victory over Democratic presidential candidate Hillary Clinton in the 2016 US Election has been largely negative, with warnings about the implications of his win for the US economy and stockmarket.
Commodities
Meanwhile, ETF Securities forecast a rotation into safe-haven assets in the event of a Trump victory could see gold prices jump by as much as 10% over the next 12 months. Gold has already risen 3.3% to $1,317 per ounce.
James Butterfill, head of research & investment strategy at the passive specialist, said: "President Trump would bring more political unpredictability than any president for generations, particularly over the US Federal Reserve's leadership and monetary policy strategy."
Meanwhile, Jeremy Baker, Vontobel Asset Management's commodity and alternative investment product manager, said Trump's victory is "pro the oil industry" relative to Clinton, as he intends to pump a great deal of cash into the country's dated infrastructure system.
"Since infrastructure is very old in the US, development is needed and Trump has been talking a lot about fiscal policy. Clearly, he would be more pro the oil industry compared to Clinton," said Baker.
Fixed income
Paresh Upadhyaya (right), director of currency strategy, US, at Pioneer Investments, said Trump's threats to replace Federal Reserve chair Janet Yellen when her four-year term is up in 2018 will hit fixed income markets because he is likely to appoint hawkish candidates.
He said: "The key difference between the Clinton and Trump proposals is that Trump has much greater infrastructure spending and large across-the-board personal income tax cuts.
"The combination of greater stimulus to the US economy and rising debt should put upward pressure on Treasury yields. In response, this would likely prompt the Fed to tighten at a faster pace."
Similarly, the M&G Bond Vigilantes team has previously warned a Trump victory would result in heightened volatility across global bond and currency markets, hitting emerging markets in particular.
"EMs would be hit the worst given Trump's tough stance on China and Mexico. This market reaction could look similar to previous US risk-off events such as the 2008 financial crisis, the 2011 loss of the US government AAA rating, and the 2013 taper tantrum," it said.
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Deficit
In October, the Committee for a Responsible Federal Budget estimated Trump's policies would increase the US debt ceiling by $5.3trn, while Clinton's policies were estimated to cost just $200bn.
David Osfield, co-manager of the Amity International fund at EdenTree IM, said: "Trump appears much more willing to take on incremental debt at a national level to fund investment.
"This would come in the form of domestic infrastructure spending, and is a positive for cyclical equities in the short term. With such a relaxed view on debt, markets are likely to question the sustainability of such a policy, while Congress may oppose further lifting of the debt ceiling."
However, Ryan Paterson, research analyst at Thesis Asset Management, said Trump's pledge to reduce corporation tax rates to 15% and increase infrastructure spending could in fact benefit both company earnings and prospects for the economy.
"Trump is pro-business: lighter regulation coupled with lower corporation tax should prove supportive to equity markets," he said.
