Afternoon Market Update – 10/11/2016 – by Jaz Singh

Stocks have continued to rally this morning following Trump’s shock victory in the Presidential election. This follows the feeling that his expansionary fiscal policies shall stimulate the economy. Following gaps to the downside across the major European indices yesterday morning, stocks have more than recovered their losses as the outlook for a Trump presidency becomes more positive. Bank and pharmaceutical stocks are rising on the prospects of reduced regulation, with higher lending rates in the medium to long term also beneficial for the financial services sector. In the fixed income space, yields on 10 year US treasuries have risen by 2 basis points. Trump’s policy suggests that inflation shall rise at a faster pace, inducing a quicker hiking path from the Fed. Commodities have also seen continued upside. Trump’s plan to improve the nation’s infrastructure means demand for industrial metals shall increase under his tenure.  However crude oil is little changed for today’s trade with WTI hovering near the $45 handle. All focus in the oil market is on OPEC with market participants losing confidence in the cartel’s ability to reach an output deal.