Tag: markets
On A Wave Of Anger, Trump Defeats Clinton And Republicans Sweep

On A Wave Of Anger, Trump Defeats Clinton And Republicans Sweep

By Steve Holland and John Whitesides

(Reuters) – Republican Donald Trump stunned the world by defeating heavily favored rival Hillary Clinton in Tuesday’s presidential election, ending eight years of Democratic rule and sending the United States on a new, uncertain path.

A wealthy real-estate developer and former reality TV host, Trump rode a wave of anger toward Washington insiders to win the White House race against Clinton, the Democratic candidate whose gold-plated establishment resume included stints as a first lady, U.S. senator and secretary of state.

Worried a Trump victory could cause economic and global uncertainty, investors were in full flight from risky assets. But the U.S. dollar and world stocks began to steady in the European morning on Wednesday, having been hammered overnight.

Trump collected enough of the 270 state-by-state electoral votes needed to win a four-year term that starts on Jan. 20, taking battleground states where presidential elections are traditionally decided, U.S. television networks projected.

He appeared with his family before cheering supporters in a New York hotel ballroom, saying it was time to heal the divisions caused by the campaign and find common ground after a campaign that exposed deep differences among Americans.

“It is time for us to come together as one united people,” Trump said. “I will be president for all Americans.”

He said he had received a call from Clinton to congratulate him on the win and praised her for her service and for a hard-fought campaign.

His comments were an abrupt departure from his campaign trail rhetoric in which he repeatedly slammed Clinton as “crooked” amid supporters’ chants of “lock her up.”

Republicans also kept control of Congress. Television networks projected the party would retain majorities in both the 100-seat U.S. Senate and the U.S. House of Representatives, where all 435 seats were up for grabs.

At Clinton’s election event at the Javits conference center a mile away from Trump’s event, an electric atmosphere among supporters expecting a Clinton win slowly grew grim as her losses piled up.

Clinton opted not to appear at her event, instead sending campaign chairman John Podesta out to tell her supporters to go home. “We’re not going to have anything more to say tonight,” he said.

Clinton was expected to speak on Wednesday morning, an aide said.

Prevailing in a cliffhanger race that opinion polls had clearly forecast as favoring a Clinton victory, Trump won avid support among a core base of white non-college educated workers with his promise to be the “greatest jobs president that God ever created.”

In his victory speech, he said he had a great economic plan, would embark on a project to rebuild American infrastructure and would double U.S. economic growth.

His win raises a host of questions for the United States at home and abroad. He campaigned on a pledge to take the country on a more isolationist, protectionist “America First” path. He has vowed to impose a 35 percent tariff on goods exported to the United States by U.S. companies that went abroad.

Trump, who at 70 will be the oldest first-term U.S. president, came out on top after a bitter and divisive campaign that focused largely on the character of the candidates and whether they could be trusted to serve as the country’s 45th president.

The presidency will be Trump’s first elected office, and it remains to be seen how he will work with Congress. During the campaign Trump was the target of sharp disapproval, not just from Democrats but from many in his own party.

Countries around the world reacted with stunned disbelief.

German Defense Minister Ursula von der Leyen, an ally of Chancellor Angela Merkel, described the result as a “huge shock” and questioned whether it meant the end of “Pax Americana”, the state of relative peace overseen by Washington that has governed international relations since World War Two.

Neighbor Mexico was pitched into deep uncertainty by the victory for Trump who has often accused it of stealing U.S. jobs and sending criminals across the border.

British Prime Minister Theresa May congratulated Trump and said the two countries would remain “strong and close partners on trade, security and defense.”

Iranian Foreign Minister Mohammad Javad Zarif called on Washington to stay committed to last year’s international nuclear deal with Iran, which Trump has threatened to rip up.

Trump’s national security ideas have simultaneously included promises to build up the U.S. military while at the same time avoiding foreign military entanglements.

He wants to rewrite international trade deals to reduce trade deficits and has taken positions that raise the possibility of damaging relations with America’s most trusted allies in Europe, Asia and the Middle East.

Trump has promised to warm relations with Russia that have chilled under President Barack Obama over Russian President Vladimir Putin’s intervention in the Syrian civil war and his seizure of Ukraine’s Crimea region.

Putin sent Trump a congratulatory note on Wednesday, saying he hoped that they can get the U.S.-Russian relationship out of crisis.

Trump entered the race 17 months ago and survived a series of seemingly crippling blows, many of them self-inflicted, including the emergence in October of a 2005 video in which he boasted about making unwanted sexual advances on women. He apologized but within days, several women emerged to say he had groped them, allegations he denied. He was judged the loser of all three presidential debates with Clinton.

A Reuters/Ipsos national Election Day poll offered some clues to the outcome. It found Clinton underperformed expectations with women, winning their vote by only about 7 percent, similar to Obama when he won re-election in 2012.

And while she won Hispanics, black and millennial voters, Clinton did not win those groups by greater margins than Obama did in 2012. Younger blacks did not support Clinton like they did Obama, as she won eight of 10 black voters between the ages of 35 and 54. Obama won almost 100 percent of those voters in 2012.

During the campaign, Trump said he would “make America great again” through the force of his personality, negotiating skill and business acumen. He proposed refusing entry to the United States of people from war-torn Middle Eastern countries, a modified version of an earlier proposed ban on Muslims.

His volatile nature, frequent insults and unorthodox proposals led to campaign feuds with a long list of people, including Muslims, the disabled, Republican U.S. Senator John McCain, Fox News anchor Megyn Kelly, the family of a slain Muslim-American soldier, a Miss Universe winner and a federal judge of Mexican heritage.

A largely anti-Trump crowd of about 400 to 500 people gathered outside the White House after his victory, many visibly in shock or tears. Some carried signs that read “stand up to racism” and “love trumps hate.”

The election was unprecedented in the way it turned Americans against each other, according to dozens of interviews in rural United States and across some of the most politically charged battleground states.

Throughout his campaign – and especially in his acceptance speech at the Republican National Convention in July – Trump described a dark America that had been knocked to its knees by China, Mexico, Russia and Islamic State. The American dream was dead, he said, smothered by malevolent business interests and corrupt politicians, and he alone could revive it.

He has vowed to win economic concessions from China and to build a wall on the southern U.S. border with Mexico to keep out undocumented immigrants.

As financial markets absorbed the prospect of Trump’s win, the Mexican peso plunged to its lowest-ever levels. The peso had become a touchstone for sentiment on the election as Trump threatened to rip up a free trade agreement with Mexico.

His triumph was a rebuke to Obama, a Democrat who spent weeks flying around the country to campaign against him, repeatedly casting doubt on his suitability for the White House. Obama will hand over the office to Trump after serving the maximum eight years allowed by law.

Trump promises to push Congress to repeal Obama’s troubled healthcare plan and to reverse his Clean Power Plan. He plans to create jobs by relying on U.S. fossil fuels such as oil and gas.

Trump’s victory marked a frustrating end to the presidential aspirations of Clinton, 69, who failed for the second time to be elected the first woman U.S. president.

In a posting on Twitter during Tuesday evening, she acknowledged a battle that was unexpectedly tight given her edge in opinion polls going into Election Day.

“This team has so much to be proud of. Whatever happens tonight, thank you for everything,” she tweeted.

The wife of former President Bill Clinton, she held a steady lead in many opinion polls for months. Voters perceived in her a cautious and calculating candidate and an inability to personally connect with them.

Even though the FBI found no grounds for criminal charges after a probe into her use of a private email server rather than a government system while she was secretary of state, the issue allowed critics to raise doubts about her integrity. Hacked emails also showed a cozy relationship between her State Department and donors to her family’s Clinton Foundation charity.

Trump seized on the emails to charge that Clinton represented a corrupt political system in Washington that had to be swept clean.

(Writing by John Whitesides and Alistair Bell; Additional reporting by Amanda Becker, Emily Stephenson and Christopher Kahn in New York, Letitia Stein in St. Petersburg, Florida, Luciana Lopez in Miami, Colleen Jenkins in Winston-Salem and Kim Palmer in Ohio; Editing by Howard Goller and Frances Kerry)

IMAGE: Donald Trump greets supporters during his election night rally in Manhattan.   REUTERS/Mike Segar

Stock Futures, U.S. Dollar, Oil Prices Plunge As Markets Recoil From Trump

Stock Futures, U.S. Dollar, Oil Prices Plunge As Markets Recoil From Trump

By Wayne Cole

SYDNEY (Reuters) – The U.S. dollar sank and stocks plummeted as mayhem came to world markets on Wednesday as investors faced the possibility of a shock win by Republican Donald Trump that could upend the global political order.

Every new TV network projection in the U.S. presidential election showed the race to be far closer than anyone had thought, sending investors stampeding to safe-haven assets.

Sovereign bonds and gold surged while the Mexican peso went into near free-fall as stations gave North Carolina to Trump.

“Markets are reacting as though the four horsemen of the apocalypse just rode out of Trump Tower,” said Sean Callow, a forex strategist at Westpac in Sydney.

“Or at least 3 of them – it might be 4 when the prospect of a clean sweep of Congress sinks in.”

As of 0425 GMT, Trump was leading Democratic rival Hillary Clinton by 19 Electoral College votes, with a tally of 228-209, with several key battleground states yet to be decided. It takes 270 to win.

U.S. stock futures recoiled more than 4.5 percent, matching the carnage that followed the British vote to leave the European Union in June that wiped trillions of dollars of value off global markets.

Investors fear a Trump victory could cause global economic and trade turmoil, discouraging the Federal Reserve from raising interest rates in December as long expected.

Fed fund futures were even starting to toy with the idea of a cut in rates next year <0#FF:> and it was possible the Bank of Japan and European Central Bank might be forced to ease policy further.

South Korean authorities were thought to have intervened to steady their currency, and dealers were wondering if central banks globally would step in to calm nerves.

The scale of the scare was clear in the Mexican peso, which plunged more than 12 percent against the dollar in the biggest daily move in two decades.

“There’s a lot of panic in the market, it is definitely an outcome it was not expecting,” said Juan Carlos Alderete, a strategist at Banorte-IXE.

The peso has become a touchstone for sentiment on the election as Trump’s trade policies are seen as damaging to its export-heavy economy.

But the story was very different against the safe-haven yen, with the dollar shedding 3.5 percent to 101.70 yen. The euro jumped 2.2 percent to $1.1265.

Graphic of live election results: http://tmsnrt.rs/2fxyZV0

Graphic of live market reaction: http://tmsnrt.rs/2fXfo0L

Live Coverage: http://live.reuters.com/event/election_2016

MAXIMUM UNCERTAINTY

Asian stocks skidded, with MSCI’s broadest index of Asia-Pacific stocks outside Japan down 2.5 percent and the Nikkei off nearly 4 percent.

With voting completed in more than two-thirds of the 50 U.S. states, the race was still too close to call in Iowa, Michigan, Wisconsin, Pennsylvania and New Hampshire, states that could be vital to deciding who wins the presidency.

Fox News projected Trump had taken Florida and North Carolina, and projected Clinton would win Virginia.

Markets have tended to favor Clinton as a status quo candidate who would be considered a safe pair of hands at home on the world stage.

“In contrast, a Trump victory would trigger massive uncertainty that would likely undermine risk assets at least initially, which in turn could preclude a Fed rate hike this year,” warned Michelle Girard, chief U.S. economist at RBS.

Sovereign bonds flew ahead, pushing yields on 10-year U.S. Treasury notes down a huge 13 basis points to 1.74 percent, again the largest drop since Brexit.

Yields had briefly touched a six-month high around 1.8960 percent in early trade.

In commodity markets, gold climbed 3.4 percent to $1,318 an ounce as the dollar slid.

Oil turned tail on concerns over the global economic outlook, with U.S. crude shedding $1.34 to $43.63 a barrel, while Brent fell $1.24 to $44.80. [O/R]

(Reporting by Wayne Cole; Editing by Kim Coghill & Shri Navaratnam)

Brexit Vote Sends New Shocks Through Financial Markets, Political Chaos Deepens

Brexit Vote Sends New Shocks Through Financial Markets, Political Chaos Deepens

By Kylie MacLellan and Anirban Nag

Britain’s decision to leave the European Union sent new shockwaves through financial markets on Monday, with the pound falling despite the country’s leaders’ attempts to ease political and economic turmoil unleashed by the move.

Finance minister George Osborne said the British economy was strong enough to cope with the volatility caused by Thursday’s referendum, the biggest blow since World War Two to the European goal of forging greater unity.

But sterling later sank to its lowest level against the U.S. currency for 31 years, continuing the fall that began last week when Britons confounded investors’ expectations by voting to end 43 years of EU membership.

This put the pound, and European bank shares, on course for their biggest two-day slides on record.

Chinese Premier Li Keqiang said uncertainties over the global economy had heightened and called for a “united, stable EU, and a stable, prosperous Britain”.

But with the ruling Conservatives looking for a new leader after Prime Minister David Cameron’s resignation on Friday and lawmakers from the opposition Labour party stepping up a rebellion against their leader, Britain sank deeper into political and economic chaos.

“There’s no political leadership in the UK right when markets need the reassurance of direction,” said Luke Hickmore of Aberdeen Asset Management, expressing the view of many in the City of London financial center.

Cameron has promised to stay on until October as a caretaker, although a committee responsible for running the Conservative leadership contest recommended a faster process that should be completed by early September.

His refusal to start formal moves immediately to pull the country out of the EU has prompted many European leaders to demand quicker action by Britain, the EU’s second largest economy after Germany, to leave the 28-country bloc.

“It should be implemented quickly. We cannot remain in an uncertain and indefinite situation,” French finance minister Michel Sapin said on France 2 television.

Guenther Oettinger, a German member of the EU’s executive European Commission, said Cameron and his party should not risk causing damage by waiting until October to act.

“Every day of uncertainty prevents investors from putting their funds into Britain, and also other European markets,” he told Deutschlandfunk radio.

German Chancellor Angela Merkel she had “neither a brake nor an accelerator” to control events.

Hoping to ensure Germany’s strong trade relationship with Britain continues, she has appeared to take a softer line than some European leaders. But she ruled out informal talks before London notifies the EU of its intention to leave under the EU’s Lisbon Treaty, which provides its constitutional basis.

Making clear the exit negotiations would not be easy, Volker Kauder, who leads Merkel’s conservatives in parliament, told ARD television: “There will be no special treatment, there will be no gifts.”

 

FINANCIAL MARKETS’ MISJUDGMENT

Financial markets misjudged the referendum, betting on the status quo despite abundant signs that the vote would be close.

When reality dawned, the reaction was brutal. Sterling fell as much as 11 percent against the dollar on Friday for its worst day in modern history, while $2.8 trillion was wiped off the value of world stocks — the biggest daily loss ever.

That trumped even the Lehman Brothers bankruptcy during the 2008 financial crisis and the Black Monday stock market crash of 1987, according to Standard & Poor’s Dow Jones Indices.

Osborne tried to ease investors’ concerns in his first public comments since the referendum. He said he was working closely with the Bank of England and officials in other leading economies for the sake of stability as Britain reshapes its relationship with the EU.

“Our economy is about as strong as it could be to confront the challenge our country now faces,” he told reporters. “It is inevitable after Thursday’s vote that Britain’s economy is going to have to adjust to the new situation we find ourselves in.”

U.S. Treasury Secretary Jack Lew also tried to restore calm, telling CNBC television it had been “an orderly impact so far” though he later added: “We have resilience built into our economy, but we’re not cut off from the world.”

Visiting Brussels, U.S. Secretary of State John Kerry said it was important that “nobody loses their head” as the EU and Britain deal with the fallout from the referendum.

 

“PENSIONS ARE SAFE”

The vote to leave the EU has increased the likelihood of Scotland holding a second referendum on independence. The first, two years ago, rejected independence but some voters opposed it on concerns this meant leaving the EU.

Boris Johnson, a leading proponent of a Brexit and likely contender to replace Cameron, praised Osborne for saying “some reassuring things to the markets”.

The former London mayor said it was now clear “people’s pensions are safe, the pound is stable, markets are stable. I think that is all very good news.”

But financial markets took a different view, with sterling sliding Monday, shedding more than 3 percent against the dollar to $1.3221

The yield on British 10-year government bonds fell below one percent for the first time due to investors betting that the Brexit vote would trigger a Bank of England interest rate cut aimed at steading the economy.

Many economists have cut economic growth forecasts for Britain, with Goldman Sachs expecting a mild recession within a year. But the risks affect economies far beyond Britain.

“Against the backdrop of globalization, it’s impossible for each country to talk about its own development discarding the world economic environment,” China’s Li told the World Economic Forum in the city of Tianjin.

Japanese Prime Minister Shinzo Abe instructed his finance minister to watch currency markets “ever more closely” and take steps if necessary.

At the weekend, the policy chief of Abe’s LDP party held open the possibility of currency intervention to weaken the yen and temper “speculative, violent moves”.

 

DIVIDED PARTIES

The outcome of the referendum has revived talk in Scotland of a new vote on independence, two years after Scots rejected such a move. Stunned by Thursday’s vote, a sufficient number of people have signed a petition calling for a new referendum on Britain’s EU membership to force lawmakers to at least consider a debate on the issue.

The referendum has also revealed social as well as economic stresses in divided Britain.

Immigration was one of the main themes of the referendum campaign, alongside discontent with Britain’s political establishment in general and the Conservatives in particular. Many Brexit backers complained the EU had allowed uncontrolled numbers of migrants to arrive from eastern Europe.

Police said offensive leaflets targeting Poles had been distributed in Huntingdon, central England, and graffiti had been daubed on a Polish cultural center in central London on Sunday, three days after the vote.

According to a local newspaper, the Cambridge News, the leaflets said “Leave the EU/No more Polish vermin” in English and Polish.

The Polish embassy in London said it was shocked by the “xenophobic abuse” aimed at the Polish community and others.

With Britain now facing uncertainty over how its trade relationship with the EU will unfold, Johnson tried to calm fears by writing in the Daily Telegraph newspaper that there would be continued free trade and access to the single market.

He suggested Britain would not have to accept free movement of workers, saying it could implement an immigration policy which suited business and industry.

However, single market rules stipulate that countries must accept the free movement of people as well as goods. Yielding on immigration would anger many Britons who voted to leave.

Johnson is expected to declare soon that he is running to lead the Conservatives, who have been divided for decades between pro- and anti-EU factions.

Divisions within the opposition are also deep. A wave of Labour lawmakers resigned from leader Jeremy Corbyn’s team on Monday, adding to the 11 senior figures who quit on Sunday.

They say Corbyn, a left-winger who has strong support among ordinary party members, is not fit to lead the party and point to his low-key campaign to keep Britain in the EU.

If repeated at the next parliamentary election, due in 2020, they fear Labour faces disaster following its near wiping out in Scotland last year. Corbyn has said he is going nowhere.

 

(Additional reporting by David Lawder, William James, Jamie McGeever, Nigel Stephenson, Kevin Yao, Costas Pitas, Bate Felix, Andrea Shalal, Michael Holden, Guy Faulconbridge, David Milliken, Patrick Graham, Anirban Nag, Michelle Martin, Paul Carrel, Conor Humphries, Minami Funakoshi and Tetsushi Kajimoto, Writing by David Stamp, Editing by Timothy Heritage)

Photo: Workers walk in the rain at the Canary Wharf business district in London, Britain November 11, 2013. REUTERS/Eddie Keogh/File Photo

U.S. Economy Creates A Strong 280,000 Jobs In May

U.S. Economy Creates A Strong 280,000 Jobs In May

By Don Lee, Tribune Washington Bureau (TNS)

WASHINGTON — Employers in the U.S. added a robust 280,000 jobs last month and average workers’ earnings ticked higher — reassurance that the six-year-old economic recovery remains on track despite faltering in the weather-marred first quarter.

The nation’s unemployment rate ticked higher, to 5.5 percent in May from 5.4 percent the previous month, but that was largely because more people entered the labor market.

The Labor Department’s report Friday also had some encouraging news on the wage front: The average hourly earnings of all private-sector workers rose eight cents to $24.96 in May, which was up 2.3 percent from a year ago. Though still moderate, it has risen steadily from an annual gain of two percent in February.

Job growth in May was broad-based and far exceeded analysts’ expectations. Forecasters were looking for a similar increase as April’s growth of 221,000. Adding to the bright news, Labor officials revised up the jobs added in March to 119,000 from the previously reported 85,000.

All in all, the report affirms the view that the dismal economic numbers earlier in the year were largely the result of the harsh winter and work stoppages at West Coast ports. Economic output shrank in the first quarter, deflating hopes that this year would be a breakout year for growth.

Friday’s employment statistics, however, suggest there is still good steam left in the U.S. economy, which next month enters its seventh year of recovery from the Great Recession.

With the new May data, job growth has averaged 217,000 in the first five months of this year. That is down from an average of 260,000 a month in 2014, but still a solid pace that is about double what is needed to absorb the population growth and new entrants to the labor force.

Analysts also were heartened by the gain in wages, which have been slow to come despite an economy that is approaching full employment.

“While still weak, as the labor market continues to tighten, we expect to see further acceleration in wage growth in 2015,” said Gad Levanon, who follows the job market for the Conference Board, a New York-based employer-sponsored research group.

Photo: Unfinished Business via iStock