As election results rolled in, global and futures markets responded to the surprisingly close contest by plummeting, with the Dow dropping nearly 800 points. Follow along here for continuing updates on how the world financial markets are responding to the election of Donald Trump as 45th president of the United States.
While the U.S. election was still being decided on Tuesday night, markets in Asia took a dive during active trading as Donald Trump pulled ahead of projected-winner Hillary Clinton.
But markets in Asia bounced back this morning: An hour into trading, the Nikkei is up 6 percent, wiping out losses from yesterday. Stocks in Hong Kong and Shanghai have also recovered: Both the Hang Seng and Shanghai Composite have soared pass yesterday’s losses. (An odd sidenote: a stock in China which sounded like “Trump Wins Big” rallied while another stock which sounded like “Aunt Hillary” tumbled as votes were still being counted.)
It’s worth watching how investors in China will react to the actual Trump presidency. After all, the candidate has suggested that China’s economic relationship with the U.S. might get a lot more complicated once he takes office. During the course of his presidential campaign, Trump accused China of devaluing its currency (a claim that has been debunked) and unfairly taking manufacturing jobs away from Americans. Trump has also suggested imposing a 45 percent tariff on Chinese-made goods in order to reduce the trade deficit and bring jobs stateside, which would create a trade war between the two nations and undoubtedly affect China’s economic growth.
Reuters reports that Chinese President Xi Jinping congratulated Trump in a message earlier today, stating that he’s looking forward to working with Trump to “uphold the principles of non-conflict, non-confrontation, mutual respect, and win-win cooperation." For now, stocks in China, like those in the U.S., seem accepting of the impending Trump administration.
At the end of trading hours on Wednesday, it certainly seems that investors have digested Trump’s surprise victory in the U.S. Presidential election.
The Dow, S&P 500, and NASDAQ all rallied back from precipitous drops in the futures markets, with each closing up by at least 1 percent. The reversal was swift and intense—for the S&P the bounce back was largest since the days of the 2008 banking crisis. The Dow closed up 257 points, after diving 800 points last night in futures trading. Many analysts are attributing the market’s fast recovery to the tone of Trump’s late night acceptance speech, along with the potential benefits for Wall Street a Trump presidency could hold. Though Wall Street was expecting a Clinton win, the numbers seem to indicate that it is just as welcoming to the Trump presidency.
Asian markets open in just a few hours, and their performance tonight will either validate election night panic in emerging markets (the Nikkei plunged 5 percent, while the Hang Seng fell by 2 percent), or evaporate in the face of U.S. investor confidence.
DeVry Education Group is up 9 percent in today’s trading; Apollo Education Group, the company that owns several for-profit institutions—including the University of Phoenix—is up 7 percent; Bridgepoint Education (which was forced to forgive $24 million in student debt by the Consumer Financial Protection Bureau) up 17 percent; and Strayer Education (one of the most successful for-profit colleges) is up 12 percent.
The premise for investor confidence is that for-profit colleges—which have come under intense scrutiny in recent years by The Department of Education for fraudulent marketing, bad results, and saddling students with student-loan debt—might enjoy looser regulatory oversight once Trump becomes President. Afterall, Trump University, which shuttered in 2010, was a for-profit education company. Before Trump is sworn in next year, he will appear in court just after Thanksgiving as a witness in a class-action civil trial over alleged fraud at Trump University.
Bloombergreports that the billionaire investor Carl Icahn—a long time Trump supporter—left the president-elect’s victory party in the wee hours of the morning to bet $1 billion on the U.S. stock market.
Icahn’s take was that the 100-point drop in the S&P 500 was a temporary and irrational reaction that would soon reverse itself. And it looks like he was right, near the close of trading, the S&P was up more than 1 percent—the largest reversal for the index since the 2008 crisis.
The companies are soaring as analysts reckon that Trump will row back on the Department of Justice’s ruling this summer to phase out privately run jails. The companies could benefit still further from Trump’s plan for the mass deportation of immigrants.
And what about oil?
During his campaign, Trump has pledged to implement what he calls an “America first energy plan.” That plan calls for total energy independence achieved by undoing President Obama’s executive actions meant to curb energy production or emissions in favor of more climate-friendly policies, more exploration of shale, oil, and natural gas reserves, and exploration of “clean coal”.
Conversely, Trump has said that he would reverse the current U.S. commitment to battle climate change, including pulling out of the Paris Agreement. My colleague Robinson Meyer wrote about the potential environmental consequences of a Trump presidency here, saying:
This could shatter the international consensus on reducing greenhouse-gas emissions, similar to how the second Bush administration’s withdrawal from the Kyoto Protocol effectively ended that treaty’s functional life within the United States. It could enable other countries to abandon their commitments and emit greenhouse gases at much higher rates.
While markets have rebounded broadly, there are still big winners and big losers today.
At the conclusion of this election, concerns over the diminished power of the second amendment have seemed to dissipate. With Americans no longer concerned that a Clinton presidency would mean stricter gun control laws, the sense of urgency causing some to stock up on arms may have eased, causing a drop in major gun manufacturing stocks, such as Smith and Wesson, which declined by more than 3.75 percent around 12:20pm.
On Monday, world markets surged ahead on the projection that Democratic candidate Hillary Clinton would narrowly capture the presidency.
U.S. indicators—the Dow, the Nasdaq, and the S&P 500—rose 2 percent on forecasts predicting a Clinton victory.
But as the tides began to change last night—with Donald Trump pulling an eventual upset to become the U.S. president-elect—the market began to react. For a variety of reasons, markets don’t always respond well to uncertainty. The market shifts were somewhat predictable: the peso plunged to a record low, U.S. futures dived, Asian markets—particularly the Nikkei which dropped 5 percent by close—also dived, while gold rallied big. Analysts noted that the volatility seen last night was much greater than following the surprising result of the Brexit vote earlier this year.
This is not the outcome investors anticipated, but U.S. markets have since recovered: all three indices are surging ahead gaining nearly 1 percent by noon.
So why are the markets worried? First of all, the policy statements of Mr Trump have been both vague and erratic—on issues such as trade, foreign policy, the independence of the Federal Reserve and even the commitment to repay Treasury bonds in full. What is hard to know is how serious his policy proposals might be, and how much Congress would allow him to enact. He has more freedom in foreign policy areas than in the domestic arena. That is why emerging markets might take the greatest hit.
The House intelligence committee chair, a Trump ally, muddied waters and gave comfort to the White House, but he provided no evidence of wrongdoing or support for Trump’s “wiretap” claims.
Updated on March 22 at 5:24 p.m.
In a head-spinning development on Capitol Hill on Wednesday, Representative Devin Nunes, the chair of the House Permanent Select Committee on Intelligence, revealed that … well, what Nunes revealed isn’t totally clear.
Nunes held a brief press conference Wednesday afternoon saying that “on numerous occasions the Intelligence Community incidentally collected information about U.S. citizens involved in the Trump transition.” But Nunes’s vague statements raised a host of questions, and his decision to announce them publicly and then go to the White House to brief President Trump, having not informed Democrats on the committee about his new findings, cast a pall of politics over the proceedings.
“There is evidence that … is very much worthy of investigation” of collusion between Trump’s campaign and Russia, the Democratic vice chair of the House intelligence committee tells Meet the Press Daily.
Adam Schiff, the ranking Democrat on the House intelligence committee, said MSNBC Wednesday afternoon that there is evidence that is “not circumstantial” of collusion between the Trump campaign and the Russian government.
Schiff’s statement escalates the rhetoric on Capitol Hill about allegations of ties between Russia and the president’s circle. It follows two major developments. On Monday, FBI Director James Comey confirmed that his bureau is investigating collusion. Then, on Wednesday, Representative Devin Nunes, the chair of the House intelligence committee, made a puzzling announcement about so-called incidental collection of information from Trump team members. Nunes made that announcement without informing Schiff first.
New research on the creatures’ family tree could “shake dinosaur paleontology to its core.”
When I first read Matthew Baron’s new dinosaur study, I actually gasped.
For most of my life, I’ve believed that the dinosaurs fell into two major groups: the lizard-hipped saurischians, which included the meat-eating theropods like Tyrannosaurus and long-necked sauropodomorphs like BrontosaurusYes, Brontosaurus. It’s a thing again. ; and the bird-hipped ornithischians, which included horned species like Triceratops and armored ones like Stegosaurus. That’s how dinosaurs have been divided since 1887. It’s what I learned as a kid. It’s what all the textbooks and museums have always said. And according to Baron, a Ph.D. student at the University of Cambridge, it’s wrong.
By thoroughly comparing 74 early dinosaurs and their relatives, Baron has radically redrawn the two major branches of the dinosaur family tree. Defying 130 years of accepted dogma, he splits the saurischians apart, leaving the sauropods in one branch, and placing the theropods with the ornthischians on the other. Put it this way: This is like someone telling you that neither cats nor dogs are what you thought they were, and some of the animals you call “cats” are actually dogs.
Warnings that the president’s cavalier disregard for truth would have real-world consequences were vindicated on Tuesday.
Donald Trump’s first two months in office have obviously been rocky. But the disruptions have mainly been internally generated—Trump’s tweets, the tensions and shakeups in his staff, his battles with the press, the investigations—rather than responses to genuine external emergencies. By historic standards, not much has really “happened” in the outside world since January 20.
Sooner or later, something will happen, and Trump and his administration will have to respond.
In mid-April of his first year in office, the new president John Kennedy had to deal with Bay of Pigs fiasco that he had authorized. In early April of his first year, the new president George W. Bush had to manage the repercussions of Chinese and U.S. military planes colliding midair off Chinese territory, and the U.S. plane being forced to a landing at a Chinese base. (Not to mention what happened in September of his first year.)
New books point to gathering trouble in both Asia and Europe.
As the United States under President Trump recedes from world leadership, things are not looking so good elsewhere on earth. Two new books—with similarly morbid titles—have arrived to warn of big trouble ahead for both the European Union and the emerging economies of Asia.
The End of the Asian Century by Michael Auslin offers a point-by-point debunking of the “Asiaphoria” that gripped so many imaginations a decade ago. James Kirchick’s The End of Europe tours a continent in which democratic and liberal forces are losing ground to Russia-infatuated extremists of right and left. The conclusion left behind by a reading of the two together: The post-American world predicted by Fareed Zakaria a decade ago is shaping up as an exceedingly unstable and uncomfortable place.
Many experts have blamed a poor job market, but new research indicates that an overlooked cause may be poor health.
CHARLOTTE, North Carolina—John LaRue is having a tough time of it these days. He used to move things for people, advertising his services on Craigslist. But work slowed up, and he became homeless and started sleeping in his truck, until, that is, someone stole it.
Now, he told me, he’s fighting alcoholism and his health is deteriorating from living on the streets. I met LaRue at a Social Security office outside of Charlotte, where he was hiding his belongings in the bushes because he didn’t have anywhere to keep them and wasn’t allowed to bring them inside. “I feel like there’s a cloud over my head,” he told me. “It’s just been one thing after another.”
LaRue is one among many. In 1957, 97 percent of men in America ages 25 to 54 were either working or looking for work. Today, only 89 percent are. Italy is the only OECD country with a lower labor-force participation rate for men in their prime years. Just why there are so many men who aren’t working is a matter of debate. In a 2016 report, President Obama’s Council of Economic Advisers examined the declining labor-force participation rate and suggested that a drop-off in good jobs for low-skilled men was part of the explanation. Wages, the report theorized, are so low for many jobs that don’t require a college education that men don’t find it worth it to seek out bad jobs. A lack of job training and job-search assistance—when compared to other OECD countries—makes it more difficult for men to move into more lucrative fields. And a surge in incarceration has made it more difficult for men to find work when they leave prison, according to the report.
Even if the ride-sharing service goes under, it won't necessarily set off a bubble-popping chain reaction.
The thing about a market bubble is that you don’t really know how big it is until it pops. So it doesn’t pop, and doesn’t pop, and doesn’t pop, until one day it finally pops. And by then it’s too late.
The dot-com collapse two decades ago erased $5 trillion in investments. Ever since, people in Silicon Valley have tried to guess exactly when the next tech bubble will burst, and whether the latest wave of investment in tech startups will lead to an economic crash. “A lot of people who are smarter than me have come to the conclusion that we’re in a bubble,” said Rita McGrath, a professor of management at Columbia Business School. “What we’re starting to see is the early signals.”
How “engagement” made the web a less engaging place
Here’s a little parable. A friend of mine was so enamored of Google Reader that he built a clone when it died. It was just like the original, except that you could add pictures to your posts, and you could Like comments. The original Reader was dominated by conversation, much of it thoughtful and earnest. The clone was dominated by GIFs and people trying to be funny.
I actually built my own Google Reader clone. (That’s part of the reason this friend and I became friends—we both loved Reader that much.) But my version was more conservative: I never added any Like buttons, and I made it difficult to add pictures to comments. In fact, it’s so hard that I don’t think there has ever been a GIF on the site.
The president was cheered at a Kentucky rally for a politically correct attack on Colin Kaepernick.
During the 2016 election, dozens of voters told me they would vote for Donald Trump partly because they were sick of “social justice warriors” and political correctness. “There is no saying ‘Hey, I disagree with you,’ it's just instant shunning,” a 22-year-old told me in a long exchange on the subject. “Say things online, and they'll try to find out who you are and potentially even get you fired for it.”
Nothing was less popular among this cohort than those who targeted someone’s job, or took glee in their denying them the ability to earn a living, over their speech or political views.
And yet, as best I can tell, they are silent this week. There is no appreciable backlash among President Trump’s supporters to a Kentucky rally where he gleefully bragged about his role in publicly shaming a man for his political views, and the ongoing inability of that man to find a job because of his call-out.
The chairman of the House intelligence committee, which is investigating Russia’s electoral interference, has made public statements so hard to believe that they verge on disqualifying.
Representative Devin Nunes, a Republican, is chairman of the House Intelligence Committee. He is therefore leading a key probe into whether or not Donald Trump’s presidential campaign had ties to Russian meddling in the 2016 election.
Can an inquiry he leads be trusted?
The skeptics include Evan McMullin, the former CIA operative who launched an independent bid for the presidency last year, billing himself as a conservative alternative to the Republican nominee. He says the House GOP “can't be trusted to investigate Russia & Trump's Kremlin ties,” adding, “a special select committee is needed.” And that mistrust seemed vindicated Tuesday when Nunes responded to a journalist’s question about the Russia investigation with a highly dubious answer.