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Trump victory - what are private investors doing?

Laith Khalaf | 9 November 2016 | A A A

You’re about to read press releases, which we’ve written for media use only. They’re not intended for individual investors. They’re not personal advice and don’t include any recommendations.

No recommendation

You’re about to read press releases, which we’ve written for media use only. They’re not intended for individual investors. They’re not personal advice and don’t include any recommendations.

Media contact:

Laith Khalaf

Senior Analyst

Direct Line: 0117 980 9866

Mobile: 07977570820

Email: laith.khalaf@hl.co.uk

  • Share dealing volumes double normal Wednesday level
  • Investors buy mining, pharma and gold
  • Buy/sell ratio stable at 62% / 38%
  • Currency update
  • What should investors do?

Following Donald Trump’s victory in the US election we have seen trading volumes rise this morning, to double the level we would expect on a typical Wednesday.

While elevated, this trading activity is much lower than we saw the day after Brexit, when dealing volumes stood at around six times normal levels.

So far this morning 62% of share trades placed via our Vantage online trading platform have been buys, with 48% or orders being sells, in line with a typical trading day.

Below are the top 10 trades placed this morning, with purchases of mining stocks, Glaxo and ETFS Physical gold clearly reflecting themes we have seen in the market following the election result.

Laith Khalaf, Senior Analyst, Hargreaves Lansdown:

"Private investors have been busy this morning, and while trading volumes are elevated, they are much lower than they were the day after the Brexit vote.

The election result has put some wind in the sales of mining companies and the pharmaceutical sector, and gold has also done quite nicely out of a Trump victory.

With heavy weightings in AstraZeneca and GlaxoSmithKline, Neil Woodford’s equity income fund is likely to be a winner from a Trump victory, so far at least.

However the market is not utterly dominated by election fever, perhaps because of the lack of a clearly identifiable Trump trade, and other drivers are also at play in the UK stock market.

Indeed, Sainsbury is bringing up the rear of the Footsie, thanks to the company posting a poor set of results, rather than anything to do with the next resident of the White House.

Overall a Trump victory has so far failed to trigger the global stock market panic that many expected. As with Brexit, this is a cautionary reminder not to try to base investment strategies on the outcome of political events. Sometimes the unexpected happens, and when it does, you can’t predict the direction markets will take.

So what should investors do? Private investors should seek to maintain a diversified portfolio with an appropriate level of risk, which is invested as tax-efficiently as possible. Those who want to invest but are fearful of share price falls should look at setting up a monthly savings plan to take the sting out of market volatility.

Getting these basics right will carry private investors much further towards their financial goals than the nebulous activity of timing markets, which pre-occupies too much of the financial industry."

Top 10 Online Share Buys by HL Vantage clients

  1. Lloyds Banking Group
  2. Glencore
  3. Randgold Resources
  4. Boohoo.com Ordinary
  5. ETFS Metal Securities Ltd Eft Phy Gold
  6. Sirius Minerals
  7. Legal & General Group
  8. GlaxoSmithKline
  9. Marks & Spencer Group
  10. Scottish Mortgage IT

Current market levels / daily change (12:00pm):
GBP/USD 1.2445 (+0.50%)
GBP/EUR 1.1218 (-0.07%)
GBP/AUD 1.6175 (+1.41%)
USD/JPY 103.14 (-1.90%)
USD/MXN 19.871 (+8.51%)

Chris Saint, Senior Analyst, HL Currency Service:

"The Mexican peso is the biggest mover on the currency markets after Donald Trump’s shock election win. It fell by as much as 14% to an all-time low of 20.782 against the US dollar as the result became apparent, with Trump having previously pledged to undo Mexico’s favourable trade arrangements set out under the North American Free Trade Agreement.

The US is Mexico’s most important exports market by a long distance. At one stage a flight to safety had seen the Japanese yen rise as much as 4% versus the dollar, with the USD/JPY rate sliding to a one-month low of 101.17.

Sterling initially rose more than 1% to a high of US$1.2547, but subsequent moves have been less erratic than might have been expected and by midday the pound is worth just 0.5% more on the day at US$1.2445."

NOTES TO EDITORS

Globelynx and ISDN ready

Hargreaves Lansdown is equipped with a live in-house broadcast camera via the Globelynx network and has an ISDN line available for radio interviews - 0117 934 9006. To arrange an interview with a Hargreaves Lansdown spokesperson please contact the person you wish to speak to directly using the contact details above, or call Globelynx on 0207 963 7060 or email globelynx@globelynx.com.


You’re about to read press releases, which we’ve written for media use only. They’re not intended for individual investors. They’re not personal advice and don’t include any recommendations.