7 Inverse/Leveraged ETFs To Buy As Markets Make Way For Trump

After a close contest, Republican Donald Trump shockingly won the race to the White House. And as he readies himself as the 45th President of the United States, the markets will try to adjust to his ways.

The majority of Wall Street analysts believe that the S&P 500 will see a big sell-off on Trump’s victory. Macroeconomic Advisers warned that a Trump win would wipe out 7% of the S&P 500’s market value, eroding more than $1 trillion of wealth. Strategists at Citigroup and JP Morgan expect a sell-off in the range of 3–5% while the S&P 500 index may nosedive as much as 13%, a per Barclays. The chief investment officer at BMO Private Bank in Chicago, forecast that U.S. stocks could drop as much as 10% over the next 10 sessions if Trump is elected.

This is because Trump’s unpredictable nature and anti-trade policies could result in complete chaos in the global economy, discouraging the Federal Reserve from raising interest rates in December. He has threatened to renegotiate or terminate the North American Free Trade Agreement – the free trade deal between Canada, Mexico and America – and has pledged to crack down on immigration. Further, Trump seeks to impose barriers in the United States on imports from countries such as Mexico and China, which could reduce trade flows and hurt global growth.

Market Impact

Trump’s victory rattled the global stock market, triggering a broad sell-off. The S&P 500, Dow Jones and Nasdaq 100 futures plunged as much as 5%, hitting safety breakers. This suggests that the stock market could suffer its biggest ever plunge when Wednesday’s trading session begins and could see its biggest percentage decline since August 2011 when a 5.5% plunge stemmed from the country’s credit rating downgrade news. However, the U.S. futures recovered to a certain extent.

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