Following Donald Trump's election victory, the markets' response to the big news has come as a surprise to many analysts and economists. DW's Wall Street reporter Lars Halter takes a sober look at what's happened.
The polls were far off. Dozens of respected pollsters spending millions of dollars failed to foresee Donald Trump's victory. And experts on Wall Street weren't any better at predicting. In case of a Trump victory they were sure of only one thing: The market would tank. Well, it did only briefly.
Not that markets didn't show any sort of panic during election night. Once numbers for Hillary Clinton came in weaker than expected, Dow futures lost 400 points. Then 500. Then 600. By the time a Trump presidency was all but called by the TV networks, contracts on the blue-chip index had lost 800 points and suggested Wall Street might experience its worst day in years.
Then, the sun rose again. And futures on Wall Street were friendly. Upon opening, markets started rising slowly before going in rally mode, adding almost 2 percent by the end of post-election day. On Thursday, the Dow Jones extended the rally, proving once more that even the best and brightest experts are much better interpreters of current market swings then prophets of those to come.
What did the experts miss? Apparently, the fact that a lot of money was sitting on the sidelines before the election. With uncertainty gone, that money is being invested now.
And investors seem to be a lot more pragmatic than the augurs thought. While the financial and economic ramifications of a Trump presidency are still unknown, some things seem clear.
"We know for sure in terms of his policies, that Trump's going to deregulate banks and that should be positive," trader Peter Tuchman said.
Financials were among the biggest winners after the election, as were pharmaceuticals and some industrials, all on the same premise: that a President Trump would deregulate as much as possible, giving corporations an opportunity to grow their business and cut costs. A longer leash for banks, no price pressure for makers of medicine, no air filters for industrial plant - a Trump presidency is a boon to corporate America, as much as it is a threat to consumers, public health and the environment.
It is yet unclear what policies Donald Trump will put in place as president of the United States. As candidate for the Republican Party he was all over the place, often contradicting himself. One thing is safe to assume: he will change the rules for American business. And whether change is good or bad in the big picture, money can be made by the sheer volatility it brings with it.
Have something to say? Add your comments below. The thread is open for 24 hours from posting.