![\"\"](\"http:\/\/internal.clientcommunity.com.au\/uploaded\/level\/1882\/images\/2016_Images\/us_election2.jpg\")
<\/p>\nThe political circus has ended, the campaign tent is now folded. Americans appear to have elected Donald Trump as their new President. President Trump will lead an economy with deep problems and mixed prospects. The narrow victory for President Trump reveals a divided nation.<\/p>\n
Many American workers feel that their \u2018best days\u2019 are actually in the past rather than future. Low wages, the loss of full-time skilled jobs with only brief and rare part-time work opportunities available, expensive education and health care costs for families \u2013 these challenges have faded the American dream.<\/p>\n
<\/p>\n
For many Americans, the pride of being \u201cBorn in the USA\u201d has become \u201cForlorn in the USA\u201d.<\/strong><\/p>\n While the US has etched out a modest economic recovery since the depth of the GFC in 2008, there have been more twists and turns on the journey than Route 66.\u00a0\u00a0 Event risks such as the US credit rating downgrade, Federal Government shutdowns with a polarised Congress, as well as the sharp \u201cfiscal cliff\u201d budget tightening, and strong US dollar over recent years, have all restrained US economic growth.<\/p>\n Hence the new President faces considerable hurdles over the next four years to overcome. The political landscape has its own rocky terrain that needs to be negotiated.<\/p>\n Republicans have retained control of both the Senate and the House of Representatives. This Republican-majority Congress has generated acrimony and gridlock over the past six years with the current\u00a0Democrat President Obama.<\/p>\n With President Trump, there now seems more scope for compromise between Congress and the White House.\u00a0\u00a0\u00a0<\/p>\n The current \u201cState of the Union\u201d shows US economic growth has averaged 1.7% in 2016. This is well below the 3% average growth pace prior to the GFC. The US\u2019s corporate sector appears reluctant to invest even with low interest rates. This may be due to better opportunities elsewhere as well as the political risk in Washington DC. For all the advanced labour skills and technology available, US productivity has been also been disappointingly flat over recent years.<\/p>\n America\u2019s unemployment has now fallen to 4.9% which is similar to pre-GFC experience (chart Black line<\/strong>). Yet this masks the scale of under-employment with part-time workers wanting more hours. The US underemployment rate is now 9.7% (chart red line<\/strong>) but is 1% above its average in the decade prior to 2007. So the US labour market has yet to completely heal the wounds inflicted by the GFC.<\/p>\n Source:\u00a0 Federal Reserve Bank of St Louis<\/p>\n US household disposable income has also barely increased over the past 16 years. There are also the secular challenges of an aging population and high debt burdens.\u00a0 So the average American is questioning whether the country is an economic superpower for only the privileged few rather than the majority.<\/p>\n President Trump\u2019s platform\u00a0is a remarkable combination of the traditional Republican \u2018lower taxes and smaller government\u2019 pledges combined with more confrontational\u00a0commentary on globalisation and immigration.<\/p>\n Large income and corporate tax cuts feature prominently in President Trump\u2019s plan.<\/p>\n President Trump has made numerous bold spending promises based on the financial sector and private enterprises funding. President Trump has pledged a US $1 trillion rebuilding program for infrastructure based on \u201cprivate investment funding\u201d. This is certainly ambitious, but Mr Trump is convinced that US economic growth can accelerate from the current 2% pace to \u201cgo higher than 4%\u201d or even \u201cgo to 5% or 6%\u201d.<\/p>\n The most concerning element of Trump\u2019s rhetoric is his antagonism towards international trade and immigration. Trump has condemned globalisation as \u201cmoving our jobs, our wealth and our factories to Mexico and overseas<\/em>.\u201d There is a confronting protectionist element to these pronouncements. The US under this new President may be considering\u00a0raising import tariffs and preferential treatment for US companies to preserve domestic jobs. Given that some Congressional Republicans favour global trade and an open US economy, President Trump is likely to find some considerable opposition to his policies within his own party.<\/p>\n A Trump win has resulted in dramatic financial market turbulence in the short term, given the candidate\u2019s controversial announcements on international trade. At the time of writing, Mexico\u2019s\u00a0exchange rate has already fallen by -10% against the US Dollar given the prospect of a renegotiation of the North American Free Trade Agreement (NAFTA).<\/p>\n President Trump\u2019s medium-term impact on Wall Street is a strange mix of positives (lower corporate taxes) and negatives (higher US dollar, higher US interest rates) that could prove either favourable or painful for Wall Street. However the immediate response has been negative (S&P 500 futures down by -5%) given the unexpected victory compared to market and poll predictions.<\/p>\n The assertive Trump budget stimulus program (lower taxes, larger infrastructure spend) should \u00a0place upward pressure on US Government bond yields by raising concerns over the US budget deficit. However given the initial negative impact on the US \u00a0share market, US bond yields have rallied as a defensive response.<\/p>\n As with all event shocks, it will take some time for investment markets to work through the impacts on the economy and corporate earnings. We saw as recently as June this year the market reacts quickly, falling sharply following the surprise Brexit outcome. Then within a few weeks most of these losses were recovered. While we can\u2019t be certain what the future holds, knee-jerk reactions to events can be costly to wealth accumulation.<\/p>\n Important information<\/strong><\/p>\n This communication, provided by MLC Investments Limited (ABN 30 002 641 661, AFSL 230705) (\u2018MLC\u2019) 105\u2013153 Miller Street, North Sydney 2060. MLC is a member of the group of companies comprised National Australia Bank Limited (ABN 12 004 044 937, AFSL 230686), its related companies, associated entities and any officer, employee, agent, adviser or contractor therefore (\u2018NAB Group\u2019). Any references to \u201cwe\u201d include members of the NAB Group.tag small placeholder<\/span><\/p>\n The information in this communication is indicative and prepared for information purposes only and does not purport to contain all matters relevant to any particular investment or financial instrument. The information in this communication may constitute general advice. It has been prepared without taking account of an investor\u2019s objectives, financial situation or needs and because of that an investor should, before acting on the advice, consider the appropriateness of the advice having regard to their personal objectives, financial situation and needs. The opinions expressed in this communication constitute our judgement at the time of issue. We believe that the information contained in this communication is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made at the time of compilation. No warranty is made as to their accuracy or reliability. The information in this communication is subject to change without notice, and we shall not be under any duty to update or correct it. All statements as to future matters are not guaranteed to be accurate and any statements as to past performance do not represent future performance. We may rely on third parties to provide certain information. We are not responsible for its accuracy or liable for any loss arising from person relying on information provided by third parties. Subject to any terms implied by law and which cannot be excluded, we shall not be liable for any errors, omissions, defects or misrepresentations in this communication (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the communication.\u00a0<\/span><\/p>\n This communication is directed to and prepared for Australian residents only.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" The political circus has ended, the campaign tent is now folded. Americans appear to have elected Donald Trump as their new President. President Trump will lead an economy with deep problems and mixed prospects. The narrow victory for President Trump reveals a divided nation. Many American workers feel that their \u2018best days\u2019 are actually in […]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[19],"tags":[],"class_list":["post-1288","post","type-post","status-publish","format-standard","category-general-articles","entry"],"_links":{"self":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts\/1288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/comments?post=1288"}],"version-history":[{"count":0,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts\/1288\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/media?parent=1288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/categories?post=1288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/tags?post=1288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Has polarised US politics come to an end? Can President\u00a0Trump work with a\u00a0 Republican Congress?<\/strong><\/h3>\n
Can\u00a0President Trump\u2019s economic policies raise the US\u2019s growth prospects?<\/h3>\n
![\"\"](\"http:\/\/internal.clientcommunity.com.au\/uploaded\/level\/1285\/Image\/Market_update\/election-chart.jpg\")
<\/p>\nWhat is the potential market impact of a Trump presidency?<\/h3>\n