Bullish Trump spooks markets

The FTSE has followed its US counterparts lower, after Trump laid out a stark protectionist manifesto to business leaders

•       FTSE suffers despite rising commodity stocks
•       Trump meeting highlights protectionist policies
•       Eurozone consumer confidence improves despite headwinds

The FTSE is continuing its descent, with the index picking up where it left off on Friday. On a day where Trump once more takes the headlines, we have seen a strong outperformance for UK listed commodity firms, with Antofagasta, Fresnillo and Anglo American topping the leaderboard thanks to a weakening dollar.

Donald Trump has wasted little time in his new role, choosing to host on open meeting with business leaders in front of the press. This meeting was clearly as much about the message it sends out to other businesses as it was about the CEOs in the room. Trump’s promise of lower taxes and better incentives for firms to remain in the US should have provided a boost for US stocks, yet with the likes of the Dow trading in the red, it is clear that markets instead focused on the protectionist aspects of the new president’s plans. Trump’s promise for massive import taxes on products produced abroad and shipped to the US strikes a dangerous tone, threatening to spark a trade war, hard on the heels of the currency wars of the past few years.

If today teaches us anything, it is that Trump shows little signs of slowing down, with the next four years promising to be hugely unpredictable for traders who deal with US securities. Given today’s 45 day low for the dollar index, it seems the Trump boost seems to have run its course, for now.

Eurozone consumer confidence is on the rise, despite the hurdles 2017 is likely to throw at the eurozone and EU. Consumers seem to be focused primarily upon the here and now, with improvements in economic and jobs data proving difficult to overlook despite impending elections across Holland, France and Germany.