Donald Trump's poll-defying victory has had an immediate impact on markets with some predicting a 'flight to safety' which may benefit real estate in the long term.
Global financial markets plunged immediately after the unexpected announcement that Trump had won the US election, but his subsequent victory speech calling for an injection of billions into infrastructure projects subsequently had a calming effect, with both Asian and European markets recuperating losses.
His announcement corrected falls on the dollar as the President-elect again cited his $1 trn infrastructure plan which had been unveiled 10 days before election day. The former real estate mogul has long supported infrastructure investment, and said he would spend at least double the $300 bn that Hilary Clinton had promised in the run-up to voting on Tuesday.
It was not clear this morning whether the infrastructure injection includes a 'big, beautiful wall' for the Mexican border, one of Trump's more controversial campaign pledges.
Time for cool heads
Trump's victory has sparked mixed reactions from both the political and the business community across the globe. 'Now is the time for cool heads,' Aberdeen Asset Management's senior investment strategist Richard Dunbar told the UK press. 'The US remains the country from which virtually all disruptive technology over the last 50 years has emerged; where the rule of law is sacrosanct; with relatively favourable demographics; and broad and deep pools of capital. None of these things have changed as a result of events overnight.'
Associated Press called the election for the Republican candidate at 8.49 CET as he secured the required 270 electoral college votes needed to take the White House. Following the news, the euro and pound sterling both strengthened against the US dollar, leading some to predict a recovery of London's commercial real estate, at least in the short term.
Other analysts are less optimistic. While markets traditionally favour a Republican candidate, this has not been the case with Trump.
Anti-establishment sentiment
'It's Brexit all over again. The surge in anti-establishment sentiment is definitively global. Brexit can no longer be dismissed as a freak event. It is a trend,' Eric Lonergan, macro fund manager at M&G Investment told eFinancial News.
Saker Nusseibeh, CEO of Hermes Investment Management noted that Trump might create market volatility through his pronouncements in the field of foreign policy, traditionally a preserve for presidential authority. 'The assumption is that Trump will listen to advice from professionals in the US State Department when dealing with foreign affairs, but on the campaign trail he demonstrated a clear willingness to dismiss professional advice, to the delight of his support base.'
The day before the election, CBRE infrastructure CIO Jeremy Anagnos highlighted the dangers of a Republican victory, after polls favouring Trump raised the risk profile of renewable energy projects in the US. 'Investments for new projects could be negatively impacted,' he said.
In Trump's victory speech at 8.55 CET this morning, the new President promised a major infrastructure spending plan to boost the economy in a project of 'national growth and renewal'. The dollar surged briefly against major currencies.
Europe's leaders react to Trump victory
Hungary's prime minister Viktor Orban said that the Republican's victory was 'great news' that proved 'democracy is still alive'. Orban built fences last year on Hungary's southern borders to prevent migrants entering the country and has approved of Trump's plan to block further immigration.
Russian President Vladimir Putin sent Trump a telegram expressing 'his hope to work together for removing Russian-American relations from their crisis state'.
EU Parliament President Martin Schulz said the result 'must be respected' as Trump had become 'the standard-bearer of the angst and fears of millions of Americans'.
In a statement issued by Downing Street, UK prime minister Theresa May said: 'Britain and the United States have an enduring and special relationship based on the values of freedom, democracy and enterprise. We are, and will remain, strong and close partners on trade, security and defence. I look forward to working with President-elect Donald Trump, building on these ties to ensure the security and prosperity of our nations in the years ahead.'
