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Will US market struggle with Trump’s Policies?

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Will US market struggle with Trump’s Policies?

Political parties have a huge impact on the share market and the currencies. With the newly elected President of USA, Trump, the financial position of the country seems to be affected. Trump was all the way different from the former president, Obama.

In order to understand the impact of Trump policies over U.S, the prevailing situation of the currency, Dollar need to be analyzed. After the shortage of soybean products in South Africa, Dollar had a freak surge to 3.5% in the third quarter. The US GDP shows a slowdown of 1.9% and the Economists forecast 2.2 % in the future. we can see a decline of -0.4% in forecast against the return to growth forecasts. The release of the US personal consumption has preferred a way of measuring inflation by the Federal Reserve which will also lead to the monetary tightening this year.

So existing scenarios along with Trump policies will fluctuate the financial status in the country and will reflect in the world as well. The Trump’s curb on immigrants as lead to the biggest stock market drops so far this year in the US. The S&P 500 fell 14 points or 0.60%, The Dow Jones Industrial Average lost 123 points or 0.61%, Nasdaq Composite dropped 0.83% or, 47 points while it was the largest daily percentage drop for the Dow since October. Nasdaq and S&P lost most in the late December.

Through the new policy, the US Government is actually shutting their doors to the world. The policy has been criticized from many parts of the world. Even the former president Obama has also shown his disagreement on the policy. The ban now exists against 7 Muslim – majority countries, including visa holders and legal residents. It will also affect temporarily halted the entry of refugees.

The interesting fact is that the Stocks had hit a series of record highs with Trump’s victory in US presidential election in November. The tax cuts and the simpler regulations promised by him have shown such change in the stock market. For the investors across the world, the ban on the immigrants is going to affect the business which is expected to flow to America. They believe that the new policy will have the adverse affect on the economy. The ban as already started to affect the companies that are engaged in inter-country operations. The technology sector as openly opposed the new policy as they faced hurdles in hiring foreign talents. With 1.3 % on Monday, the 2000 index of small and mid-cap companies gave back all of their January's gains. The Policy has affected even the Airlines. It includes United Continental (UAL.N) - 3.6% down and American Airlines (AAL.O) with 4.4% decline. The Delta (DAL.N) has grounded about 280 flights between Sunday and Monday with systems outage and thereby lost 4.1%. The US Government policies affected the Asia in the lower morning session and the Japanese stocks that indicated higher sell off (1%) with a support of stronger Yen.

It seems the US economy is expected to pass through difficult times with changing Government Policies like Ban on Immigrants. It will make the economist and investors have close look on Trump’s future announcements.

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