Like him or loathe him, Donald Trump is the new American president and he’s vowed to shake up the system from the off. Seismic changes in the US are felt across the globe, affecting the UK’s stocks, shares and export market. Here at Moyes Investments, we’re poised to respond to these changes and here are the factors that we will be monitoring closely.
American GDP growth
Trump’s aim is to double his nation’s GDP growth by 2018 and he’s got a mix of policies in play to ensure this happens. The combination of corporate tax cuts and infrastructure spending is expected to bring buoyancy to America’s economy. So our focus will be on the holding companies and how they are performing, with a view to increasing investment in the US by up to 5% to 10%. We want our clients to benefit from American prosperity.
Going for gold
Since the shock of Trump’s election, fluctuating markets have motivated prudent investors to put their money on gold. There has been a 7% increase in gold-related investment this year, as currencies including the dollar and the pound have been affected by the political aftershocks of Brexit and the US election. The belief is that gold is on an uptrend and that this will continue, especially as there is significant evidence of Chinese hedge funds and traders investing heavily in gold.
Trump is looking to renegotiate trade deals with importers. That’s looks like bad news for China, but could be good news for a post-Brexit Britain. Securing a new deal with the US outside the Eurozone is key to the UK’s future, and a low pound means that prices from our businesses will be competitive. A strong dollar and a weak pound will be a good combination from Trump’s perspective, and could give British business a unique chance to capitalise on freedom from the single market. That could be a big opportunity for the fortunes of some of our companies.
He’s been bullish in his criticism of some of the major players on the world stage, so how will Trump do business with the nations he’s raged about? There is a belief that he could lead America to become isolationist, and his trade tariffs could spell the end of some huge contracts between US firms and countries in East Asia and the Middle East. This could present chances for the UK to win big military manufacturing contracts historically handled by American firms. Looking to see which business win contracts that US Firms lose will be key to ensuring investments in the right stock. Clearly at MOYES we will be looking at ALL new opportunities.
If you’d like to discuss the potential of your portfolio now Trump is in power give us a call on 01638 429975 or contact us at [email protected]