US Election 2016: What does Donald Trump’s win mean for business?
Donald Trump made his name in business (albeit also by going bust four times) and cemented his fame screaming ‘You’re Fired’ on the US version of the Apprentice. But what can Wall Street, the City and the corporate world expect from its new president?
First the bad news. The markets are crashing now - and Simon Johnson, the Massachusetts Institute of Technology economist, reckons the new president’s anti-trade policies will “cause a sharp slowdown, much like the British are experiencing” after Brexit and “plunge the world into recession.”
So what’ll hurt the most?
The Mexican peso will be wincing for some time, but shares in insurers and big pharma are set to be hard hit too by the uncertainty of what will happen if Trump fulfils his promise to repeal Obamacare (although healthcare stocks would also have been wounded by Clinton’s muted price controls on drugs). Around three quarters of FTSE 100 earnings are denominated in US dollars, and Trump’s economic isolationism means internationally-exposed UK companies are now feeling wary.
But some UK firms could cash in. Trump wants big infrastructure spending, so National Grid, already growing in the US, could be a winner. Oil companies will be riding high (could Trump see BP learn to love America again?), whilst plans to restart all the coal mines should help the likes of services firms Wood Group and Weir.
Green energy companies might be ripping up any US expansion plans for a while, though. Trump’s planned boost to defence spending will see BAE Systems, Qinetiq and Meggitt rushing to boost sales staff and G4S and Serco could look to cash in on anti-immigration plans.
Chancy traders with good-timing will also likely cash in: as analyst Lawrence G. McDonald of ACG Analytics puts it, “Trump will create a colossal panic, but the relief rally will be outstanding.”
Plus there’s one business empire that is certain to flourish in the next four years. Good luck getting a booking at Trump’s Scottish golf courses when the president is in town or any of his other hotels, casinos and resorts: the hobnobbing potential has just soared.
