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Dow Jones hits record high on Trump bump - business live Dow Jones hits record high on Trump bump, but London market falters - business live
(35 minutes later)
5.33pm GMT
17:33
After three hours of trading, the Dow Jones industrial average is still on track to hit a record close.
Pharmaceutical firms, banks and manufacturing companies are all leading the rally, on predictions that they’ll benefit from Trumponomics.
But technology firms are dragging the index back, due to fears that they’ll suffer under the next presidency.
5.25pm GMT
17:25
5.24pm GMT
17:24
Here’s the story of how the Dow defied forecasts and spiked after Trump’s victory:
5.04pm GMT5.04pm GMT
17:0417:04
FTSE 100 dragged down by stronger poundFTSE 100 dragged down by stronger pound
A new burst of volatility has driven the pound up against the US dollar, triggering a late selloff in London.A new burst of volatility has driven the pound up against the US dollar, triggering a late selloff in London.
Sterling is now up 1% at $1.251, as the markets continue to be buffeted as investors come to terms with Trump’s success.Sterling is now up 1% at $1.251, as the markets continue to be buffeted as investors come to terms with Trump’s success.
A stronger pound will be welcomed by importers, but it makes a dent in the value of international companies who earn money abroad.A stronger pound will be welcomed by importers, but it makes a dent in the value of international companies who earn money abroad.
It’s been a funny day in the London stock market, even by recent standards. Bank shares have jumped, mirroring the rise in government bond yields (banks would welcome an end to ultra-low interest rates)It’s been a funny day in the London stock market, even by recent standards. Bank shares have jumped, mirroring the rise in government bond yields (banks would welcome an end to ultra-low interest rates)
Steeper yield curve is really helping US bank stocks. pic.twitter.com/kmwSG5sqQjSteeper yield curve is really helping US bank stocks. pic.twitter.com/kmwSG5sqQj
Mining stocks are also up, following the surge in commodity prices -- America will need a lot more metal to implement Trump’s new infrastructure plan.Mining stocks are also up, following the surge in commodity prices -- America will need a lot more metal to implement Trump’s new infrastructure plan.
But utility stocks, tobacco firms and other defensive stocks have slid today, some by over 5%.But utility stocks, tobacco firms and other defensive stocks have slid today, some by over 5%.
Massive moves on the #FTSE100 in both directions this afternoon. pic.twitter.com/GRiXXkq0UNMassive moves on the #FTSE100 in both directions this afternoon. pic.twitter.com/GRiXXkq0UN
4.45pm GMT4.45pm GMT
16:4516:45
The International Monetary Fund says it is looking forward to working with Donald Trump, and isn’t prejudging him.The International Monetary Fund says it is looking forward to working with Donald Trump, and isn’t prejudging him.
Spokesman Gerry Rice told a press briefing in Washington that it’s “too early to speculate” about whether Trump would hurt the global economy.Spokesman Gerry Rice told a press briefing in Washington that it’s “too early to speculate” about whether Trump would hurt the global economy.
Rice added:Rice added:
“We need to wait and see what the policies will actually be and we’ll be making an assessment at that time.”“We need to wait and see what the policies will actually be and we’ll be making an assessment at that time.”
4.17pm GMT4.17pm GMT
16:1716:17
European stock markets are heading lower in late trading, as Trump-inspired volatility grips the City again.European stock markets are heading lower in late trading, as Trump-inspired volatility grips the City again.
4.14pm GMT4.14pm GMT
16:1416:14
The S&P tech stock index has shed 3%, and is on track for its worst day since the Brexit vote (via Reuters).The S&P tech stock index has shed 3%, and is on track for its worst day since the Brexit vote (via Reuters).
3.44pm GMT3.44pm GMT
15:4415:44
Technology shares are suffering a Trump slump today, as investors calculate that Silicon Valley could suffer under the next president.Technology shares are suffering a Trump slump today, as investors calculate that Silicon Valley could suffer under the next president.
Shares in Amazon, Netflix, Alphabet (Google) and Facebook have all fallen by at least 4%, and Apple and Microsoft are in the red too.Shares in Amazon, Netflix, Alphabet (Google) and Facebook have all fallen by at least 4%, and Apple and Microsoft are in the red too.
Trump’s criticism of companies who sent manufacturing overseas and hire large numbers of skilled workers from abroad, using the H1-B visa, could be bad news for the tech sector.Trump’s criticism of companies who sent manufacturing overseas and hire large numbers of skilled workers from abroad, using the H1-B visa, could be bad news for the tech sector.
He’s also no fan of Amazon founder Jeff Bezos, whose Washington Post was pretty scathing of Trump during the election campaign.He’s also no fan of Amazon founder Jeff Bezos, whose Washington Post was pretty scathing of Trump during the election campaign.
$NDX $Nasdaq tanking, down nearly 2% against a flat $SPX. FANG stocks weighing heavily. $FB -4.5%, $APPL -2.5%, $NFLX -5%, $GOOGL -4% WM pic.twitter.com/u2pxcT101t$NDX $Nasdaq tanking, down nearly 2% against a flat $SPX. FANG stocks weighing heavily. $FB -4.5%, $APPL -2.5%, $NFLX -5%, $GOOGL -4% WM pic.twitter.com/u2pxcT101t
UpdatedUpdated
at 4.04pm GMTat 4.04pm GMT
3.32pm GMT3.32pm GMT
15:3215:32
JP Morgan: Don't judge Trump by the stock marketJP Morgan: Don't judge Trump by the stock market
Investors large and small will be relieved that Wall Street hasn’t crashed since Donald Trump pulled off one of the most surprising election results of the age.Investors large and small will be relieved that Wall Street hasn’t crashed since Donald Trump pulled off one of the most surprising election results of the age.
But obviously the market reaction plays second fiddle to the wider consequences of America’s choice -- as the protests in New York, Chicago, Boston etc overnight show.But obviously the market reaction plays second fiddle to the wider consequences of America’s choice -- as the protests in New York, Chicago, Boston etc overnight show.
Stephanie Flanders of JP Morgan says Trump needs to pass three tests, as the world watches him closely.Stephanie Flanders of JP Morgan says Trump needs to pass three tests, as the world watches him closely.
The first will be for him to build a strong cabinet, with respected figures in key posts of Treasury Secretary and Secretary of State. Second, he needs to continue to give voice to the calmer, more gracious version of himself that was on display in his election night acceptance speech.The first will be for him to build a strong cabinet, with respected figures in key posts of Treasury Secretary and Secretary of State. Second, he needs to continue to give voice to the calmer, more gracious version of himself that was on display in his election night acceptance speech.
No-one should expect him to repudiate everything he said in the campaign about open borders and trade deals such as the Trans Pacific Partnership Agreement. But the third test for the President-Elect will be to demonstrate that he does not plan to tear up the parts of the Washington establishment that are actually working quite well – notably, the US Federal Reserve.No-one should expect him to repudiate everything he said in the campaign about open borders and trade deals such as the Trans Pacific Partnership Agreement. But the third test for the President-Elect will be to demonstrate that he does not plan to tear up the parts of the Washington establishment that are actually working quite well – notably, the US Federal Reserve.
Flanders points out that Trump’s economic plans will have major implications for the global economy:Flanders points out that Trump’s economic plans will have major implications for the global economy:
The combination of looser fiscal policy and increased uncertainty over globalisation would be likely to mean a stronger dollar and potentially higher US inflation and higher interest rates. That is not a hugely helpful combination for the rest of the global economy, especially emerging markets. But that, too, is uncertain and could take time to materialise. In the meantime, my colleagues and I are not predicting a radically different path for the US economy following this result - or for US interest rates.The combination of looser fiscal policy and increased uncertainty over globalisation would be likely to mean a stronger dollar and potentially higher US inflation and higher interest rates. That is not a hugely helpful combination for the rest of the global economy, especially emerging markets. But that, too, is uncertain and could take time to materialise. In the meantime, my colleagues and I are not predicting a radically different path for the US economy following this result - or for US interest rates.
And remember, Trump’s success or failure won’t be measured in stock prices or foreign exchange rate. Flanders says:And remember, Trump’s success or failure won’t be measured in stock prices or foreign exchange rate. Flanders says:
This is about the kind of country that America wants to be.This is about the kind of country that America wants to be.
At the heart of Donald Trump’s appeal was a promise to make it a nation that works better for the mass of voters who feel they have been left behind by globalisation and by the global financial crisis. For better or worse, that is the standard by which every developed country politician will increasingly be judged. Whether Mr Trump will actually deliver with on that promise is another matter.”At the heart of Donald Trump’s appeal was a promise to make it a nation that works better for the mass of voters who feel they have been left behind by globalisation and by the global financial crisis. For better or worse, that is the standard by which every developed country politician will increasingly be judged. Whether Mr Trump will actually deliver with on that promise is another matter.”
3.00pm GMT3.00pm GMT
15:0015:00
Analyst: Republican unity driving markets upAnalyst: Republican unity driving markets up
Let’s be honest, most analysts had predicted heavy losses if Trump won the presidential election. And most analysts were wrong.Let’s be honest, most analysts had predicted heavy losses if Trump won the presidential election. And most analysts were wrong.
There are four pragmatic reasons to explain why stock markets have rallied since Trump won the presidential race, says Jim Cielinski of Columbia Threadneedle Investments.There are four pragmatic reasons to explain why stock markets have rallied since Trump won the presidential race, says Jim Cielinski of Columbia Threadneedle Investments.
UpdatedUpdated
at 3.00pm GMTat 3.00pm GMT
2.57pm GMT2.57pm GMT
14:5714:57
Banks stocks are rallying this morning, with JP Morgan up 4% and Goldman Sachs gaining 2%.Banks stocks are rallying this morning, with JP Morgan up 4% and Goldman Sachs gaining 2%.
They’re benefitting from speculation that the Republicans could ditch Dodd-Frank, the legislation brought in to avoid a repeat of the financial crisis.They’re benefitting from speculation that the Republicans could ditch Dodd-Frank, the legislation brought in to avoid a repeat of the financial crisis.
Pharmaceutical stocks are up too, with Pfizer gaining 3.6%. Drug companies are boosted by Hillary Clinton’s defeat, as she’d promised to end price-gouging.Pharmaceutical stocks are up too, with Pfizer gaining 3.6%. Drug companies are boosted by Hillary Clinton’s defeat, as she’d promised to end price-gouging.
And construction and infrastructure companies are benefitting from Trump’s promise to rebuild American infrastructure. Caterpillar is up 2%.And construction and infrastructure companies are benefitting from Trump’s promise to rebuild American infrastructure. Caterpillar is up 2%.
UpdatedUpdated
at 3.04pm GMTat 3.04pm GMT
2.42pm GMT2.42pm GMT
14:4214:42
New all time high for the Dow Jones index as investors continue to welcome Trump's apparent pro-business stance.New all time high for the Dow Jones index as investors continue to welcome Trump's apparent pro-business stance.
2.40pm GMT2.40pm GMT
14:4014:40
Dow Jones hits intraday record highDow Jones hits intraday record high
Boom! The Dow Jones industrial average has hit a new intraday record high, as the Trump bump reached New York.Boom! The Dow Jones industrial average has hit a new intraday record high, as the Trump bump reached New York.
Shares have risen at the start of trading in Wall Street, adding to yesterday’s rally, and defying predictions that markets would slump if Republicans won the race for the White House.Shares have risen at the start of trading in Wall Street, adding to yesterday’s rally, and defying predictions that markets would slump if Republicans won the race for the White House.
The Dow is up 115 points, or +0.6%, at 18709.The Dow is up 115 points, or +0.6%, at 18709.
And the S&P 500 and the Nasdaq has gained at least 0.5% too:And the S&P 500 and the Nasdaq has gained at least 0.5% too:
Investors are still optimistic that Trump will deliver a growth-friendly fiscal stimulus scheme, despite the concerns flagged up earlier in this blog.Investors are still optimistic that Trump will deliver a growth-friendly fiscal stimulus scheme, despite the concerns flagged up earlier in this blog.
Indeed, there’s a remarkable u-turn underway, as Wall Street hopes that the billionaire businessman can metamorphose into a responsible president.Indeed, there’s a remarkable u-turn underway, as Wall Street hopes that the billionaire businessman can metamorphose into a responsible president.
Conner Campbell of SpreadEx says it shows how fickle investors can be:Conner Campbell of SpreadEx says it shows how fickle investors can be:
Before yesterday morning Trump was toxic yet now, following a vulgarity-free victory speech and back-peddling comments about Janet Yellen’s position at the Fed, he is the biggest turn-on the market has seen in months.Before yesterday morning Trump was toxic yet now, following a vulgarity-free victory speech and back-peddling comments about Janet Yellen’s position at the Fed, he is the biggest turn-on the market has seen in months.
UpdatedUpdated
at 2.41pm GMTat 2.41pm GMT
2.27pm GMT2.27pm GMT
14:2714:27
FT: Beware Trumpflation!FT: Beware Trumpflation!
Never mind mere stagflation, the markets are being spooked by a new and scary-sounding beast. Trumpflation!Never mind mere stagflation, the markets are being spooked by a new and scary-sounding beast. Trumpflation!
The Financial Times has coined this term, to explain the big selloff in bond prices today.The Financial Times has coined this term, to explain the big selloff in bond prices today.
The fear is that bond investors might stampede for the exits if the new president drives up economic growth, inflation, and inflation expectations, with a debt-financed stimulus programme.The fear is that bond investors might stampede for the exits if the new president drives up economic growth, inflation, and inflation expectations, with a debt-financed stimulus programme.
Andrew Wilson, global co-head of fixed income at Goldman Sachs Asset Management, says:Andrew Wilson, global co-head of fixed income at Goldman Sachs Asset Management, says:
“Under a Trump presidency we are more likely to see fiscal expansion that drives growth and markets are reflecting that.“Under a Trump presidency we are more likely to see fiscal expansion that drives growth and markets are reflecting that.
“There was already latent inflationary pressures from the jobs market - Mr Trump’s election has added fuel to that. Long term inflation expectations are rising and that explains why bond yields are rising and the yield curve is steepening.”“There was already latent inflationary pressures from the jobs market - Mr Trump’s election has added fuel to that. Long term inflation expectations are rising and that explains why bond yields are rising and the yield curve is steepening.”
And if everyone tries to sell at once, yields could spike alarmingly and cause a bond crash.And if everyone tries to sell at once, yields could spike alarmingly and cause a bond crash.
‘Trumpflation risk' - not a phrase i'd ever have envisaged existing: https://t.co/6CB4RtZ4hG via @FT‘Trumpflation risk' - not a phrase i'd ever have envisaged existing: https://t.co/6CB4RtZ4hG via @FT
UpdatedUpdated
at 2.38pm GMTat 2.38pm GMT
2.05pm GMT2.05pm GMT
14:0514:05
Alan Greenspan, the former head of the Federal Reserve, fears America is entering an era of stagflation -- rising prices, but little real growth.Alan Greenspan, the former head of the Federal Reserve, fears America is entering an era of stagflation -- rising prices, but little real growth.
He’s been speaking on CNBC:He’s been speaking on CNBC:
Greenspan repeats his warning of stagflation: inflation will pick up and boost profit margins but that will be a "false dawn" @CNBCGreenspan repeats his warning of stagflation: inflation will pick up and boost profit margins but that will be a "false dawn" @CNBC
Greenspan also backed Donald Trump over one issue - the regulation of America’s banking sector - saying:Greenspan also backed Donald Trump over one issue - the regulation of America’s banking sector - saying:
“I’d love to see Dodd-Frank disappear.“I’d love to see Dodd-Frank disappear.
Former Fed Chair Greenspan says 'I'd love to see Dodd-Frank disappear' https://t.co/p3WoT0jb5tFormer Fed Chair Greenspan says 'I'd love to see Dodd-Frank disappear' https://t.co/p3WoT0jb5t
1.58pm GMT1.58pm GMT
13:5813:58
Bond yields surge amid inflation fearsBond yields surge amid inflation fears
Ouch! A nasty selloff is underway in the government bond market right now.Ouch! A nasty selloff is underway in the government bond market right now.
The price of debt issued by countries such as the US, the UK and Germany is falling sharply, driving up the interest rates (or yield) on the debt.The price of debt issued by countries such as the US, the UK and Germany is falling sharply, driving up the interest rates (or yield) on the debt.
Investors appear to be betting that Donald Trump’s economic policies will drive up inflation, should he succeed in slashing tax rates and embark on that debt-fuelled programme of rebuilding America’s infrastructure.Investors appear to be betting that Donald Trump’s economic policies will drive up inflation, should he succeed in slashing tax rates and embark on that debt-fuelled programme of rebuilding America’s infrastructure.
As FXTM research analyst Lukman Otunuga puts it:As FXTM research analyst Lukman Otunuga puts it:
Pledges of massive U.S fiscal spending have heightened expectations of Trump implementing fiscal stimulus measures, including tax cuts which may bolster profit growth consequently boosting inflation.Pledges of massive U.S fiscal spending have heightened expectations of Trump implementing fiscal stimulus measures, including tax cuts which may bolster profit growth consequently boosting inflation.
So, bond prices are a sea of electronic red ink, as investors are less keen to hold low-yielding government bonds in a world of higher inflation.So, bond prices are a sea of electronic red ink, as investors are less keen to hold low-yielding government bonds in a world of higher inflation.
Mr Bond is in serious trouble pic.twitter.com/HxtLKDgkfdMr Bond is in serious trouble pic.twitter.com/HxtLKDgkfd
Lower bond prices shows that governments must pay more to service their national debts.Lower bond prices shows that governments must pay more to service their national debts.
Longer-dated debt is also weakening:Longer-dated debt is also weakening:
Most scary chart for bond investors: Price of 30y German bonds have plunged by 14% since summer 2016. pic.twitter.com/v0XMgXQOPsMost scary chart for bond investors: Price of 30y German bonds have plunged by 14% since summer 2016. pic.twitter.com/v0XMgXQOPs
We should remember that bond yields have been driven down to record low levels in recent years, as central banks have hoovered them up through their quantitative easing schemes.We should remember that bond yields have been driven down to record low levels in recent years, as central banks have hoovered them up through their quantitative easing schemes.
So a return to normal levels wouldn’t be a disaster.So a return to normal levels wouldn’t be a disaster.
Except....a hefty bond selloff would suggest alarm in the markets, and inflict losses on those who have bought at the elevated levels recently.Except....a hefty bond selloff would suggest alarm in the markets, and inflict losses on those who have bought at the elevated levels recently.
And that may explain why the FTSE 100 is now negative, and other European markets are lower as this morning’s Trump Bump threatens to fizzle out.And that may explain why the FTSE 100 is now negative, and other European markets are lower as this morning’s Trump Bump threatens to fizzle out.