Trump stimulus to boost global markets

 

Inflation looked set to finally reappear in global markets in 2017, buoyed by United States President-elect Donald Trump’s fiscal policies and their effect on the US economy. 

 

 

Speaking via video link at a media briefing in Sydney yesterday, Blackrock’s Hong Kong-based chief investment officer for active investments, Belinda Boa, said the theme of ‘reflation’, or inflation coupled with global growth, was set to transform global markets in the coming year. 

“This is a theme that has been building since the middle of the year, but we’ve really seen that the US election results have amplified this in terms of growth and inflation outlook, as well as this policy shift to more fiscal spend,” Boa said. 

“We can see that the US has taken the lead in terms of inflation – we are seeing both manufacturing and services PMI (purchasing managers index) spiking more recently, but also we have seen an increase in wage inflation, which is what we were expecting.” 

She said China had also followed the US’s lead in producing positive inflation results during the third quarter of 2016 for the first time in five years, meaning the reappearance of inflation was not just centred on a single economy. 

“This has significant positive implications for industrial profits and corporate earnings out of China, so it‘s not just a US inflation story,” she noted. 

While it was hard to predict the precise impact of Trump’s economic policies, the best estimates suggested the President-elect’s tax cut plans in particular could stimulate further spending in the US economy, she said. 

“Based on the estimates, most of [Trump’s] fiscal reform is going to be driven by tax, whether it’s corporate or individual tax cuts,” she said. 

“The second point is the huge amount of uncertainty around what the fiscal spend may do in the US - the range or uncertainty around the impact of this is still pretty large.” 

Following the election of Trump and the Brexit vote, political risks were likely to continue having an effect on the global economy in 2017, particularly in Europe where several important elections were due, she added. 

“Italy, France, Germany, the Netherlands, all of them are facing political risks around this rise of populism that we have seen over the course of 2016,” she said.

 

Sarah Kendell
Thursday 15 December 2016
financialobserver.com.au

 

Any advice contained in this website is of a general nature only and does not take into account your circumstances or needs. You must decide if this information is suitable to your personal situation or seek advice.

Rolanda has been my financial adviser for 20 years. I have always found her to be highly intelligent, knowledgeable and professional in her career. Rolanda is accessible at all times and patiently explains terms that I do not fully understand. I can highly recommend Rolanda and it is a pleasure to do so. I do this with the utmost confidence. Marcia Montgomery (Retiree – home duties and ex-clerk with Water Board)
I retired Oct 2012, and seeking Financial Advice for my retirement funds, I decided to have Rolanda look after my financial affairs, and so happy I did. Since my retirement I am extremely comfortable with Rolanda’s advice, experience and strategies and the returns on my investments. Rolanda is my "Breath of Fresh Air" at this stage of my life and she makes herself available 24/7 should you need to talk with her. Steve Hoad (Ground Engineer, Qantas)
In 1997 I left Energy Australia and decided to join Rolanda Adams Financial Services for the financial support and advice that I would need into the future. That decision has proved a very good one and I am still with Rolanda who has given me advice and friendship over those many years. The advice given has ensured that my investments have been protected and the major losses, of some, during the GFC was not felt by me unduly. Rolanda and her team are very easy to contact at any time and one is always received in a most professional manner. I would be most happy to recommend Rolanda Adams Financial Services to all who need financial services. Graham Fleeton (Manager, Property Insurance Group Energy Australia (Ausgrid))
Rolanda has been my Adviser for the past 18 years. Through her wide industry experience and professional expertise she has ensured the sound development and ongoing management of my investments. Her advice has invariably been sound, timely and entirely tuned to meet my personal needs in retirement. She has a friendly, engaging manner and is always readily available to address any of my concerns. I have no hesitation in recommending her. Neil O'Keeffe (Chief Inspector (retired), Australian Customs Service)

© 2019 Rolanda Adams Financial Services Pty Ltd. All rights reserved. Site by PlannerWeb.