Investor concerns surrounding a Donald Trump presidency have fallen given the growing Hillary Clinton lead, but investors face new uncertainties with the potential for a democratic sweep, says Jim McDonald, chief investment strategist at Northern Trust. He told its ‘Outlook for the Markets and the U.S. Election’ session that the best result would be a divided government with Clinton as president and the republicans capturing Congress. This would be acceptable to the markets since divided control provides tremendous checks and balances. However, he said concerns over election promises like Trump hiring more people to control immigration and Clinton’s vow to increases taxes on the rich are groundless as neither has the authority to spend or increase taxes. The biggest concern is that a President Trump could impose interim tariffs which would have an impact on the economy. And while the angst around the election has been huge, the performance of stocks has been typical for an election year. There will be some uncertainty around the election and then a modest upward movement. And for Trump to win, there would need to some sort of a bombshell. He called the FBI investigation into Clinton’s use of her private eMail to send government material a surprise, but Trump needs something bigger to win, although Clinton’s lead has deteriorated in recent weeks.
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