More political turmoil is coming, according to investors after Donald Trump’s win

In a survey of investors , 57% said the unexpected election of Donald Trump is merely a layover on the way to a fresh peak in political-risk premiums


Disdain for Treasuries was another strong theme of the survey, conducted by Bank of America Merrill Lynch on 9 November. Photo: iStock
Disdain for Treasuries was another strong theme of the survey, conducted by Bank of America Merrill Lynch on 9 November. Photo: iStock

Hong Kong: The unexpected election of a president who’s never held political office is merely a layover on the way to a fresh peak in political-risk premiums, according to 57% of investors who responded to a survey conducted by Bank of America Merrill Lynch in the aftermath of the vote.

That may help explain why a similar portion of respondents said they were making no change to their cash holdings. Disdain for Treasuries was another strong theme of the survey—conducted on 9 November—and one which has been borne out in subsequent days by the sell-off that brings the total of value wiped off bonds worldwide this week to $1 trillion.

A mere 2% of the 114 respondents recommended buying in. The most popular post-election trade in the survey was buying the S&P 500, a preference 30% of investors subscribed to. Nearly 15% said they were selling risky assets, while 12% said buy gold. Only 4% of respondents said the election result won’t affect their plans.

Also read: Donald Trump butterfly effect routs currencies, bonds as copper surges

The poll also shows that investors are “discounting fiscal stimulus not protectionism”, as the note’s authors wrote, after 46% of the respondents said they expect Trump is most likely to proceed with corporate-tax repatriation and infrastructure spending plans during his first 100 days. A mere 5% expect new trade policies during that period. Bloomberg

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