Stocks in stunning Trump rebound

FINANCIAL markets have undergone one of the most incredible reversals in history in the wake of Donald Trump’s shock election win.

IT’S always darkest before The Don.

Financial markets posted one of the most stunning turnarounds in history on Thursday after a global meltdown in the wake of Republican Donald Trump’s shock election victory, which saw $35 billion wiped from the ASX a day earlier.

Here’s how it unfolded. All times are in Australian Eastern Daylight Time (AEDT).

Devastation and frustration echoed through the Javits Center as it became clear that Donald Trump won the election https://t.co/yjgX8Acbti pic.twitter.com/fGBM5WjqJe

— CNN (@CNN) November 9, 2016

Trump ran his campaign like a business. Here's a short video breaking down how he managed the huge win: pic.twitter.com/rhRQm3SbOu

— Eric Bolling (@ericbolling) November 10, 2016

$34bn wiped off the Aust share market yesterday...$58bn put back on today!

— Shane Oliver (@ShaneOliverAMP) November 10, 2016

• 4:30pm

Market posts best gains in five years

And that’s a wrap. More than $50 billion has been added to the value of the Australian share market in its best session since 2011, as investors speculate Donald Trump’s presidency could boost the US economy.

At 4:15pm on Thursday, the S&P ASX/200 index was up 172.2 points, or 3.34 per cent, at 5,328.8 points, and the All Ordinaries was up 170.6 points, or 3.26 per cent, at 5,408.9 points. The December share price index futures contract was up 171 points at 5,323 points, with 56,730 contracts traded.

— AAP

• 4:15pm

Polling industry launches inquiry

America’s leading industry association for professional pollsters has launched an inquiry into how it got the US election so wrong, The Telegraph reports.

The American Association for Public Opinion Research said it had set up a committee which would investigate the accuracy of polls, the methodologies used and any differences with previous elections.

“The polls clearly got it wrong this time and Donald J Trump is the projected winner in the electoral college,” it said in a statement.

“Although Clinton may actually win the popular vote, her margin is much lower that the three to four per cent lead the polls indicated. And many of the state polls over-estimated the level of support for Clinton.”

• 4:13pm

Trump trade policy to shape global markets

US President-elect Donald Trump’s trade policies, particularly with China, will be critical for the global economy, including major exporter Australia, according to economists.

HSBC Australia chief economist Paul Bloxham says the surprise election of Mr Trump increases economic uncertainty and creates a risk of increased protectionism that would weaken global trade.

“For Australia, the main negative impact seems likely to be the effect that reduced global trade could have on Asian growth, given Asia’s high trade reliance,” Mr Bloxham said.

However, weaker Asian exports could mean more policy support for infrastructure investment, particularly in China, which would support demand for commodities. “Continued strengthening of Australia’s economic ties to China should be a priority as it would help support local growth even in the face of rising global trade protectionism,” Mr Bloxham said in a research report.

During the hotly fought US presidential election campaign, Trump vowed to increase trade protection, including tariffs of 45 per cent on Chinese goods and 35 per cent on Mexican goods.

Trump and Democratic presidential candidate Hillary Clinton both opposed the Trans-Pacific Partnership (TPP) — a 12-nation regional free trade agreement that includes Australia, Canada, Japan and the US.

University of NSW Business School economics fellow Tim Harcourt said the rhetoric has been isolationist and protectionist but the reality may be different, given Mr Trump needs backing from Congress.

“Most of the market concern was instability and so on but that seems to have died down a bit now after the generous victory speech,” he said. “The main issue will be how he treats China, Japan and Korea. I suspect the Chinese that are very pragmatic and they know the difference between rhetoric, sabre rattling and reality.”

If it’s more than rhetoric, Australia could position itself as a “stable, open partner” in the region. “The other consideration is that most trade policy in the US is determined by Congress, so its really the reaction of Congress to international trade as much as what the president may want,” he said.

The Republican Party has retained control of both houses of Congress but many Republicans don’t like or agree with Mr Trump’s policies.

Trump is unlikely to start a direct trade fight with Australia as he doesn’t see us a risk, but if he causes problems with China it could have a knock-on affect on the local economy. “We’d be collateral damage,” Mr Harcourt said.

British asset manager Standard Life Investments believes Mr Trump’s trade policy will be “pivotal” for the global economy.

Mr Trump’s pledge to increase trade protection and cut immigration would simultaneously weaken economic growth and increase inflationary pressures.

“It is plausible that the new administration will not ramp up tariffs on Mexican and Chinese imports, content instead to bury the prospect of new trade agreements and make more use of enforcement clauses in existing agreements,” Standard Life said in a research report.

— AAP

• 2:58pm

Why the Trump slump became a Trump jump

Financial markets have undergone one of the most incredible reversals in history — swinging from rout to resurgence in a matter of hours as investors first feared and then warmly embraced US President-elect Donald Trump.

As the Republican took the lead on Wednesday night in Australia, currency and equity markets plunged and analysts wondered just how far they would fall. The S&P500 futures market slumped five per cent in the US before a trading limit kicked in, while the local benchmark S&P/ASX 200 index closed 1.9 per cent lower.

The US dollar and its Australian counterpart also fell more than 100 basis points against the major currencies including the yen, euro and the British pound.

But then a remarkable turnaround followed: US shares surged in their Wednesday session to finish more than one per cent higher, while on Thursday morning in Australia the benchmark S&P/ASX200 posted a 3.1 per cent intraday gain. Asian shares followed the same path of post-election result slump to jump. Meanwhile, the greenback and the Aussie both completely recovered from their losses.

CMC Markets chief market strategist Michael McCathy said the rebound came after Mr Trump’s victory speech, in which he praised Democrat rival Hillary Clinton and avoided mentioning his most contentious policy positions.

“The rancour of the US election campaign appeared to evaporate after conciliatory concession and acceptance speeches from the candidates,” Mr McCarthy said. “Markets turned from predicting economic disaster to optimism about potential for economic reform.”

IG chief market analyst Chris Weston said investors had warmed to the idea that Mr Trump’s policies would likely to boost inflation and cause the US Federal Reserve to raise interest rates.

He noted that Mr Trump planned to cut some corporate taxes, repatriate other corporate funds, spend on infrastructure, erect trade barriers and attract foreign investment to the US.

“Trump will borrow and build and that is what he has done his whole life and it’s what he will do as president of the United States,” Mr Weston said. Patersons economist Tony Farnham pointed out that the market rebound had been uneven across sectors.

He said defence contractors, energy, industrial, materials and financials had risen on the prospect of supportive policies from Mr Trump and the Republican party, while healthcare shares were up as Democrat threats of drug price controls disappeared.

Meanwhile utilities, real estate and consumer staples, which are exposed to foreign trade and investment, had fallen.

Capital Economics analysts said investors knew that, unlike Brexit, the checks and balances in the US system could moderate the president-elect’s more extreme policies in office.

“Brexit means Brexit at some point. Trump doesn’t inevitably change anything. Indeed, it is fair to ask does Trump mean Trump,” they said.

— AAP

• 2:52pm

Mexican peso back from historic lows

The US dollar held on to its gains against the yen and euro Thursday, having rebounded from steep losses early the previous day.

The greenback was sent plunging in Asia Wednesday as it became apparent Donald Trump would replace Barack Obama in the White House, with dealers worried his policies could send the US economy into recession.

However, the unit strengthened and US and European stocks rallied after market-favourite Hillary Clinton conceded defeat and Trump gave a reassuring victory speech to soothe worried investors.

“He’ll certainly be friendly to American business and that could very well stimulate their economy,” said Grant Williamson, an investment adviser at Hamilton Hindin Greene, a brokerage in Christchurch, New Zealand.

“Investors are now thinking that things aren’t going to be as bad as what they had thought. It was a bit of a shock to most investors initially and now people are getting used to the idea,” he told Bloomberg.

The US dollar bought 105.32 yen in Tokyo, down from 105.72 yen in New York but still sharply up from the 101.20 yen mark touched in Asia earlier Wednesday. The euro was at $1.0937 against $1.0914 in New York, having touched $1.13 earlier Wednesday in Tokyo.

The Mexican peso also held up after recovering from Wednesday’s record low. The dollar was at 19.80 pesos, having spiked at 20.78 in Asia the previous day.

Still, the peso remains under pressure owing to Trump’s anti-immigrant rhetoric earlier in the campaign, which included a pledge to remove undocumented immigrants, build a border wall and tear up a trade deal with Mexico.

“There is speculation that [Trump’s] policy of large fiscal spending and tax cuts could boost the economy and the dollar,” Daisuke Karakama, market economist at Mizuho Bank, told AFP.

However, he added that this scenario looks only at the positive aspect of what could happen. “There are no resources to finance his tax cuts and there was no guarantee that he could get along with Congress given the divide between him and mainstream Republicans,” he said.

“I don’t expect the current dollar rally will last long.”

— AFP

• 2:44pm

Carlos Slim tightens belt

The world’s fifth-richest person, Mexican billionaire Carlos Slim, lost $US5.1 billion ($6.65 billion), or 9.2 per cent of his fortune, in the wake of Donald Trump’s shock win which sent the value of the peso plunging.

Bloomberg reports the tycoon, who owns The New York Times, led declines of $US41 billion ($53.48 billion) on the Bloomberg Billionaires Index as the US market fell at the start of trading on Wednesday.

Bloomberg says the 10 Mexican billionaires on the index dropped a combined $US6.5 billion ($8.48 billion) in early trading.

• 1:40pm

Bookies count the cost

Aussie bookmakers Sportsbet, TAB and William Hill have collectively paid out $18 million to Trump backers. Sportsbet took the biggest hit with $11 million, TAB paid out more than $4 million, and William Hill paid $3 million.

The biggest winner was a TAB punter who walked away with $500,000 after putting down $100,000 at $5. Another who put down $100,000 at $4.50 took home $450,000, and a Sportsbet punter who staked $100,000 at $3.80 walked away with $380,000.

Spare a thought, meanwhile, for the TAB punter who lost $74,000 on Clinton.

“What a day it has been and what a four years we have ahead of us,” Sportsbet spokesman Ben Bulmer said. “The punters beat us, with more than 25,000 Aussies successfully predicting the outcome of the election despite the weight of public opinion suggesting Trump was no chance. Well played.”

• 1:32pm

Dollar rises on Trump optimism

The Australian dollar has risen against all major currencies as investor fears about Donald Trump’s election win ease and commodity prices rise. At midday on Thursday, the local unit was trading at 76.62 US cents, up from 76.19 cents on Wednesday.

National Australia Bank global co-head of foreign exchange strategy Ray Attrill said the Aussie was initially boosted against the greenback as risk sentiment rose following President-elect Republican Donald Trump’s victory speech as it much more conciliatory than a lot of the “firebrand rhetoric” he used during the campaign.

“Markets, naively or otherwise basically, seem to be taking a view that some of their worst fears about, a US-instigated trade war for example, remain to be seen,” he told AAP. “It’s all a bit eerily calm again now. Obviously the general backdrop is that risk sentiment turned around dramatically.”

Mr Attrill also said the local currency had been boosted by an overnight rise in coking coal and iron ore prices, which further lifted Australia’s terms of trade. “Against major currencies it has been in the ascendancy, driven in a large part by the ongoing uptick in key commodity prices,” he said.

Trump’s pledge to renew and rebuild infrastructure on a large scale has lifted commodity prices on expectation of higher demand.

— AAP

• 12:49pm

Shares stage massive turnaround

The Australian share market is on track for its best session in more than five years, as equities stage a massive turnaround on optimism that Donald Trump’s presidency could be a boost for the US economy.

The S&P/ASX 200 index was up 3.1 per cent at noon, a gain that has more than recovered the $32.5 billion lost on Wednesday. The Australian market last posted a daily gain of more than three per cent in October 2011, when there were signs of a possible solution to the European debt crisis.

Some of the largest stocks on the market are enjoying significant gains, with BHP Billiton and Rio Tinto each up more than eight per cent and all four major banks up more than three per cent.

CMC Markets chief market strategist Michael McCarthy says there is optimism in financial markets that Trump’s election opens up the possibility of economic reform that could stimulate the US economy.

“The stunning turn in sentiment suggests there is now a consensus building that much of the policy announced during the campaign was a sales pitch rather than a commitment to act,” he said.

The only sectors of the market to fall are gold miners, as the precious metal’s value drops from its spike on Wednesday, real estate developers and several industrial companies.

— AAP

• 12:30pm

‘It’s the economy, stupid’

Finance commentator Alan Kohler has described Trump’s win as “above all, a middle-class economic revolt”.

“The middle classes were told by their betters that globalisation was good for them, and then watched as their jobs were offshored to low-wage countries and their incomes capped while the rich got richer,” he writes in The Australian.

“Trump’s election represents not just a social and political upheaval — above all this is an economic event. Among all the desperate attempts to explain the Trump victory, the one that makes the most sense echoes Bill Clinton’s 1992 campaign theme: ‘It’s the economy, stupid.’

“Globalisation — the combination of free trade and global capit­al — has lifted millions out of poverty in the emerging world, and is still doing so. But there are losers in the developed world — democracy gives them a voice, and digital media makes that voice louder and less controlled.”

• 12:26pm

Tokyo stocks soar, extending global rally

Tokyo stocks soared six per cent early Thursday after diving the previous day on Donald Trump’s shock win in the US presidential election, as global stocks and the US dollar rallied.

The benchmark Nikkei 225 index, which plummeted 5.4 per cent on Wednesday, shot up 6.0 per cent, or 975.74 points, to 17,227.28 in the first minutes of trade. The broader Topix index of all first-section issues was up 4.78 per cent, or 62.17 points, at 1,363.33.

In forex trading, the US dollar bounced back to 105.62 yen, sharply up from the 102-yen range seen when the Tokyo market closed with heavy losses on Wednesday.

The Tokyo market saw “too much of selling yesterday although I believe that was a normal reaction” to the surprise result, said Toshihiko Matsuno, senior strategist at SMBC Friend Securities.

He added that “no-one had expected that much of rally” on Wall Street and that Trump’s well-moderated attitude after his victory gave markets relief.

“Those who sold shares yesterday are buying back as they watch Trump’s next steps,” he said, adding hopes were currently building up on fiscal-spending plans under the Trump administration. “We will see more swings for some time.”

Rodrigo Catril, currency strategist at National Australia Bank, said many investors would be pondering whether Trump’s “bite will be as extreme as his bark”.

“While a Clinton presidency was seen as providing a sense of predictability and stability, a Trump presidency is likely to bring uncertainty at least over the near term with the big question being to what extent Trump’s pre-election rhetoric can or will translate into policy action next year,” he said in a note.

— AFP

• 11:50am

Aussie stocks follow global recovery lead

The Australian share market has staged a spectacular turnaround, rising more than three per cent in early trade, after US and Europe markets recovered from early losses following Donald Trump’s presidential election win.

The benchmark S&P/ASX 200 index was up 3.12 per cent at 10:44am on Wednesday. IG market strategist Evan Lucas described it as an “extraordinary swing” after local stocks closed 1.9 per cent lower on Wednesday as counting showed Trump edging closer to the White House.

In early Wednesday trade, the market gained more than one per cent as initial vote counts prompted hopes Democrat Hillary Clinton would win. It was a similar story around the world. Stock markets initially dropped sharply, before rebounding after Trump’s victory, more humble and conciliatory speech.

“Markets turned from predicting economic disaster to optimism about potential for economic reform,” CMC Markets chief market strategist Michael McCarthy said. “In one of the most extraordinary trading sessions ever, Dow futures went from more than 800 points deficit to close 247 points higher.”

The Dow Jones Industrial Average closed 1.4 per cent higher, while the S&P500 and the Nasdaq each rose 1.11 per cent.

“From a markets perspective, the risks that he was trumpeting up during the primaries and than the presidential campaign are already sort of starting to melt away very quickly,” Mr Lucas said.

Mr Lucas said he expected global markets to remain volatile for a few more days before returning to a more “normal” trading pattern ahead of Trump’s swearing in as president in January.

Locally, materials, energy, health care and financial companies were big winners on Thursday.

BHP Billiton and Rio Tinto were up $1.91, or 8.47 per cent, to $24.47 and $4.14, or 7.6 per cent, to $57.87, respectively. Energy companies Woodside Petroleum, Santos and Origin Energy were up between three to four per cent. Within the heavyweight financial sector, Commonwealth Bank, jumped $2.18, or 3.08 per cent, to $73.07.

— AAP

• 11:35am

How Trump could boost global growth

A Donald Trump presidency is likely to lift global economic growth and result in improved commodities prices that will benefit Australia, according to economists at Commonwealth Bank.

The new administration’s policies are also likely to boost equity markets, led by Wall Street, but could put an end to the era of low interest rates in major economies worldwide.

“This will be stimulatory for the US economy as personal and corporate taxes are cut. It will be expansionary for the US budget as spending goes up,” Commonwealth Bank chief economist Michael Blythe said in a conference call.

Trump has promised generous tax cuts, and more infrastructure and defence spending.

His economic policies, particularly relating to tax cuts, are likely drive capital inflows into the US economy, in turn pushing the US dollar higher, the CBA economists said.

“Capital inflows to the US will increase under a Trump administration because the cut in the company tax rate will bolster the US equity market, attracting foreign inflows, and also generate a repatriation of US profits back into the US economy,” CBA’s chief currency strategist Richard Grace said. This, in turn, will force the Federal Reserve to raise the funds rate at a faster pace than otherwise, he added.

While this will put pressure on commodity-sensitive currencies like the Australian dollar and the New Zealand dollar, CBA now expects a lower downside for the local currency.

“We now expect AUD to fall by roughly 5 per cent because it is likely to receive support from higher commodity prices, an improvement in Australia’s terms of trade and a narrower current account deficit,” Mr Grace said.

CBA economists had previously flagged a 10 per cent fall in the Aussie dollar against the greenback, over the next 12 months. The decline in the Australian dollar will also reduce the chances of additional rate cuts by the Reserve Bank, the economists say.

In fact, the Trump administration policies could also result in the end of the easing cycle in a lot of countries.

However, the greatest potential damage to the global economy could come from Donald Trump’s trade policy. Trump has threatened to label China as a currency manipulator and pledged to slap 45 per cent tariffs on imported Chinese goods.

If there are restrictions placed on Chinese goods, there could be retaliatory measures and China could look to redirect exports that are currently sent to the US, which could have a negative impact on global trade, Mr Blythe said.

China’s economy is expected to decelerate to an annual pace of 5.5 per cent from 6.5 per cent, according to the CBA economists. “Australia is far more exposed to a slowdown in the Chinese economy than it is to a pick up in the US. So certainly we are looking at that part of the scenario,” Mr Blythe said.

— AAP

• 11:21am

Trump ran his campaign like a business

Fox News anchor Eric Bolling has posted a short video breaking down how Donald Trump ran his campaign like a business to pull off the shock win.

They highlight how he cut costs, capitalised on free media cover, saved money on polling by developing a social media following, and cultivated a small group of loyalists.

Ultimately, Trump ended up spending $US4.57 ($5.98) per vote, about half the amount spent by rival Hillary Clinton, and generated in excess of $US3 billion ($3.92 billion) in free media coverage.

• 10:59am

‘They just wanted to smell the sizzle’

Financial commentator Peter Switzer, after yesterday praying to God that Trump would lose so as not to put a damper on 2017, is sounding much more upbeat today.

“It looks like Donald Trump has delivered La La Land to all of America and I’m happy to go along for the ride,” he writes.

“When I woke up this morning I was expecting to see red on the screen ... However, there was green on the screen! Now US business TV is saying the market is giving a future business-friendly administration a tick of approval.

“The former legendary CEO of GE, Jack Welch, talking on CNBC, explained what happened, quoting someone else who he thought summed it all up neatly with: ‘The media took Donald Trump literally but not seriously. His supporters took him seriously but not literally.’

“My concerns about Trump were primarily that apart from his crazy habits (though let’s face it, George W. Bush and Bill Clinton were hardly pillars of virtue), he was saying crazy things.

“A 45 per cent tariff on China! A wall between the US and Mexico! Interestingly however, within all his craziness, there were economic policies that got lost in all the stuff he had to say to sell to the people who bought his sizzle. These people didn’t care about the sausage, they just wanted to smell the sizzle — they didn’t take him too seriously. Or did they?

“I guess we’ll find that out over time.”

• 10:30am

Commodities rally boosts ASX

The surge in Australian stocks at the open on Wednesday came on the back of a rally in commodities with investors betting president-elect Donald Trump will pursue business-friendly policies.

CMC Markets strategist Michael McCarthy said it appeared a consensus was building “that much of the policy announced during the campaign was a sales pitch rather than a commitment to act”.

“Investors ignored the potential for damage to international trade and growth prospects and focused on Republican control of both houses of Congress as well as the White House,” he said. “This offers the prospect of reform that could stimulate the US economy.”

IG Markets chief strategist Chris Weston said the Australian market was poised for one of its best days in years with strong buying in commodity futures such as iron ore, steel, and copper.

“US crude has also rallied from its low and this all means huge gains for Aussie stocks today,” he said, pointing to the financial, energy and materials sectors as beneficiaries.

Among the big early gainers was global miner BHP, which popped 9.44 per cent to $24.69, while Rio Tinto jumped 9.02 per cent to $58.57. The Australian dollar firmed after Trump’s win initially sent risk currencies plummeting, and was trading at 76.62, up from 76.19 US cents late Wednesday.

— AFP

• 10:17am

Australian share market spikes sharply

And we’re off. The Australian share market has opened 2.7 per cent higher, rebounding strongly after Wednesday’s two per cent plunge.

At 10:10am on Thursday, the benchmark S&P/ASX200 index was up 142.4 points, or 2.76 per cent, at 5,299, while the broader All Ordinaries index was up 141.3 points, or 2.70 per cent, at 5,379.6. The ASX 24 the share price futures index contract was up 126 points at 5,278, with 20,902 contracts traded.

— AAP

• 10:11am

‘Traders learned from Brexit’

Here’s some more market post-mortem, this time from Fox Business Network senior correspondent Charles Gasparino.

“For all his shortcomings, Trump has one hell of a pro-growth economic plan that could save the country from the malaise of the last eight years,” he writes.

“Tuesday night and early Wednesday, while the political class and the lefty media were bemoaning a Trump victory, some savvy traders (mostly in hedge funds) began to wake up to the fact that Trump’s economic plans were far better than anything that Clinton could come up with.

“And with that, the smart money did the opposite of what happened after the Brexit vote and began to buy the market on the notion that if Trump does what he says, and listens to some savvy economic advisers, the economy will break out of its Obama-induced slumber and stocks will do just fine even without the Fed manipulating shares by printing money.

“Traders learned from Brexit that the initial market reaction was overwrought and markets recovered. It didn’t hurt, of course, that the GOP has retained power in both the House and the Senate, which allows for the passage of tax cuts, regulatory reform and the like without too much deal making with Democrats.”

• 9:58am

‘So the Wall Street speeches didn’t work’

As Trump would say: this is a movement, people.

Traders on the floor of the New York Stock Exchange were “booing” Hillary Clinton’s appearance with running mate Tim Kaine, shouting “lock her up”, according to CNBC correspondent Carl Quintanilla.

“So her Wall Street speeches didn’t work, then,” one person replied. “Our #newnormal,” tweeted another. Equity trader Timothy Anderson took issue with Quintanilla’s tweet, however. “I work on the NYSE floor and what you’re saying is totally incorrect!” he wrote.

• 9:52am

Look for buying opportunities

Chris Conway, head of research at Australian Stock Report, has published his morning note to clients. “Good morning. You will allow me some rare editorialising this morning,” he writes.

“Firstly, I happily admit that I did not want and most certainly did not expect a Trump victory. Political preferences and probabilities aside however, my job as a trader and your head of research is to assess opportunities, void of personal biases. I managed to do that yesterday and I firmly believe such opportunities will be present again today.

“Wall Street does not care who is in the White House, just as the Australian market doesn’t really care who resides at Kirribilli. Yes, certain sectors and particular stocks will be affected more or less at various points in time, but to think a political party or, more specifically, an individual person can topple the world’s financial markets is somewhat misguided.

“So, I implore everyone to look past the speculation and hyperbole, and focus on the opportunities. There will likely be a lot of them to take advantage of in the near- to medium-term.”

• 9:34am

Clinton campaign’s terrible ROI

News Corp columnist Rita Panahi’s piece in the Herald Sun today argues Trump’s win “shows mainstream media has no idea what the mainstream is thinking”.

“Trump’s victory is humiliating not only for pollsters and political pundits but for the bulk of the mainstream media who gave up any pretence of impartiality and actively campaigned against the Republican candidate,” she writes.

“Trump has overcome huge odds to secure a famous victory, defeating a brutal media campaign as well as attacks from the Republican establishment and the well-funded Clinton camp, which last month was outspending Trump by an extraordinary 75 to 1 ratio in radio ads alone.

“In a 10-day period there were 15,948 pro-Clinton radio ads in 85 major radio markets across the US, compared with only 208 radio spots for Trump according to Media Monitors.

“The Democrats also smashed Trump in terms of total TV ad spending and number of campaign workers on the ground, and then there was the chorus of anti-Trump media commentators who did much of the Clinton camp’s dirty work for free.”

• 9:25am

New Zealand cuts interest rates to record low

New Zealand’s central bank on Thursday cut interest rates to a record low 1.75 per cent in an effort to boost inflation and lower the value of the currency.

The Reserve Bank cut its benchmark rate by 0.25 per cent, its seventh quarter-point cut since June 2015. The move was expected by most economists. The bank is projecting it will keep rates low for several more years.

Bank Governor Graeme Wheeler said that around the world, economic conditions are weak and interest rates low, which is putting upward pressure on the kiwi dollar.

New Zealand’s economy is growing at a robust annual rate of about 3.6 per cent. Wheeler said that’s thanks to a growing population as well as strength in the construction and tourism industries.

The nation’s annual inflation rate is 0.4 per cent, well below the bank’s target of about 2 per cent. The New Zealand dollar is worth about 73 US cents, which is higher than exporters would like. The country’s economy relies on exports of dairy products to China.

By lowering interest rates, the reserve bank risks fuelling a runaway housing market. “House price inflation remains excessive and is posing concerns for financial stability,” Wheeler said.

New Zealand’s government had been hoping to boost exports by signing a trade deal with the US and a number of Asian countries. But Donald Trump has opposed the Trans-Pacific Partnership, and his election as the next US president this week may mean the deal is dead.

— AP

• 9:16am

US stocks surge, dow up 1.4 per cent

It turns out that President Donald Trump may not be bad for the stock market after all.

Asian stock markets stumbled shortly after Trump overtook Hillary Clinton in the presidential vote count early Wednesday. From there, Wall Street appeared set for a slump of its own, only it never materialised.

Global financial markets soon steadied as Trump delivered an acceptance speech pledging to unify a deeply divided nation.

And despite wavering in the first hour of trading, US stocks rallied the rest of the day, lifting the Dow Jones industrial average within 50 points of a record high close.

“He took on a remarkably conciliatory posture,” said Eric Wiegand, senior portfolio manager at the Private Client Reserve at US Bank. “That went a long way to demonstrating, perhaps for the first time or very few times, his presidential disposition, and gave a greater sense of calm. That’s what had an early reprieve in the markets.”

The Dow ultimately climbed 256.95 points, or 1.4 per cent, to 18,589.69. The average was briefly up 317 points. The Standard & Poor’s 500 index gained 23.70 points, or 1.1 per cent, to 2,163.26 The Nasdaq composite index rose 57.58 points, or 1.1 per cent, to 5,251.07.

Billionaire investor Carl Icahn was among those who seized on Trump’s win to play the market. He told Bloomberg that he put about $US1 billion ($1.3 billion) “to work” on stocks early Wednesday.

— AP

• 8:48am

‘Trump’s a man who’ll get things done’

No, the world didn’t end at 3pm yesterday, News Corp columnist Terry McCrann helpfully points out. “Just as with all those dire warnings of the disastrous consequences that would flow from the Brexit vote, the same applies to this,” he writes.

“Yesterday’s vote is not going to tip the global economy into recession; President Trump is not going to start World War III. What happened to our market was understandable — we just followed Wall St down. But what happened on Wall St was just dumb.

“Big investors around the world drank the Clinton Kool-Aid. That she would win and that she would be a conventional non-threatening president. No surprise, given the millions she’s personally taken from Goldman Sachs and other big US banks.”

McCrann points out that to many Australians, President Donald Trump seems as “impossible as prime minister Pauline Hanson”.

“Especially if you’d taken your information on the US presidential campaign from almost any of our local media outlets or commentators, regurgitating the almost universal US media and elite disdain of Trump.”

• 8:41am

Polls are dead, long live polls

Naeem Aslam, chief market analyst with ThinkForex, has hit the nail on the head.

“If there is any one trend which has become acute, it is the one in which the polls have started to mislead the market,” he writes.

“Going forward, we do not think anyone is going to believe them. There is absolutely no reality check and what makes it more insane is that the markets are making the same mistake over and over again. Markets were hoping for a Clinton victory, but clearly you can only live for so long in cloud cuckoo land.”

And a word on metals. “[Gold] has retraced from its highs of the day on the back of the message delivered by Trump which had the right mix,” he writes.

“The price risk for gold has two elements: firstly it is the geopolitical risk and fear of the Fed increasing the interest rate. We think chances are less than 50 per cent the Fed will increase the interest rate in September.

“Copper could be the story in the coming days, as Donald Trump wants to spend big, improve the infrastructure and double GDP growth.”

• 8:31am

Volatility is back, or at least it was

“What a day,” ANZ writes in its morning research note. “Volatility is certainly back (or it was yesterday — it has since calmed down).

“The social contract between mainstream politics and the electorate has been broken, and status quo policies will not re-establish it. More restrictive attitudes to trade policy could be negative for global growth, but it’s the direction of micro-economic policy settings (all the small stuff) that will take on heightened relevance over the coming years.”

Yesterday was a classic large risk-off move as the election results started trickling out, but markets were “calmed by an acceptance speech by President-elect Trump that was less aggressive than feared”, ANZ said.

“Equities bounced strongly, with the S&P 500 up roughly 0.8 per cent at 7am NZT [5am AEDT], and with bank and healthcare shares higher on speculation that the sectors may have an easier time in terms of regulations than may have been the case under Clinton.

“European shares also ended in the black, with the Euro Stoxx up 1.1 per cent and the UK FTSE up a similar amount having fallen more than 2 per cent at the open. It certainly makes the NZ market’s 3.6 per cent fall look overcooked.”

• 8:24am

Trump victory a ‘reversal of globalisation’

AMP Capital chief economist Dr Shane Oliver says Trump’s victory, like Brexit, “adds momentum to a backlash against establishment economic policies and specifically a move away from economic rationalist policies in favour of populism and a reversal of globalisation”.

That could be a negative for long-term global growth, he writes in a client note, and the shift away from globalisation could also add to “geopolitical instability”.

“More positively though, a greater focus on using fiscal stimulus could help reduce the burden on monetary policy and policies to reduce inequality could help support longer term economic growth.”

Dr Oliver said there was a good chance that the “economic realities and the checks and balances provided by Congress will see his policies become more pragmatic”.

“It was healthy to see that Trump’s election night speech was conciliatory and a good initial guide will be what sort of advisers Trump appoints around him,” he said.

• 7:09am

Australian market set to open sharply up

The Australian market looks set to open sharply higher after closing almost two per cent lower following the shock election of Republican Donald Trump as the next US president.

At 6:45am on Thursday, the share price index was up 167 points, or 3.24 per cent, at 5,317. On Wednesday afternoon the local market plunged, as did major markets around the world, and lost $35 billion as it became clear Republican Donald Trump was set to win the race for the While House.

— AAP

• 6:59am

Mexican stocks, peso take a beating

Global investors are seriously worried about Mexico.

The election of Donald Trump as the next president of the United States has caused investors to bet heavily against Mexico, its currency and Mexican companies. They worry that Trump’s rhetoric of building a wall, throwing out undocumented immigrants and renegotiating trade agreements will damage the country’s economy.

The peso fell nearly eight per cent in midafternoon trading on Wednesday to roughly 20 pesos to the dollar, its lowest value against the dollar in history. In comparison, the peso traded at roughly 13.50 pesos to the dollar two years ago, well before Trump announced his candidacy and the rhetoric of the 2016 election heated up. The stock market in Mexico was down more than 2 per cent in afternoon trading.

Trump’s threats to repeal or renegotiate the North American Free Trade Agreement are real and so is the potential damage to Mexico’s economy. The United States is Mexico’s largest trading partner and NAFTA makes up the backbone of that commerce.

“The relationship of Mexico and the US is uncertain,” said Isidro Morales, of the Monterrey Institute of Technology and Higher Education. “Donald Trump is not a person of institutions. Surely it will be a unilateral policy worse than [George W.] Bush and we don’t know what to expect.”

Not only would US-Mexico trade be affected under a Trump presidency, but if his rhetoric holds regarding deporting the millions of undocumented workers in the US, that could also have a negative impact to Mexico’s economy. Mexicans living abroad, most of them in the US, send a lot of money each year back home to support families. Last year $US24.8 billion ($32.39 billion) in remittances were sent to Mexico. That money is a direct infusion of cash into the Mexican economy, used to buy goods and services. If those workers must return from the US, that money will no longer be entering Mexican families’ pocketbooks.

“What are those people going to do? They will have to find a way to survive on this side,” said Reyes Isidro, a barista in Mexico City.

— AP

• 6:48am

Dollar regains some lost ground against US

The Australian dollar has regained a little ground against the US dollar following the shock election of Republican Donald Trump as the 45th US president.

At 6:35am on Thursday, the local unit was trading at 76.40 US cents, up from 76.19 cents on Wednesday. The local currency has also rebounded against the yen, the euro and the pound sterling.

— AAP

• 3:42am

US stocks gain following Trump victory

Major US stock indexes moved higher in morning trading Wednesday as Wall Street sized up the implications of Donald Trump’s stunning presidential election victory.

The solid gains marked a reversal from earlier in the morning, when global stock markets were roiled after it became clear that Trump had sealed the win over Hillary Clinton.

Markets had been jittery in recent weeks over the prospect of a Trump administration. But conciliatory comments from the president-elect helped global stock markets recover a large chunk of their earlier losses.

The Dow was up 142 points, or 0.8 per cent, to 18,472 as of 11:33am Eastern Time (3:33am AEDT). The Standard & Poor’s 500 index gained 15 points, or 0.7 per cent, to 2,154. The Nasdaq composite index rose 37 points, or 0.7 per cent, to 5,231.

A sell-off in bonds sent prices tumbling, driving the yield on the 10-year Treasury note up to 1.97 per cent from 1.86 per cent late Tuesday, a large move. Traders are selling bonds to hedge against the possibility that interest rates, which have been ultra-low for years, could rise steadily again under a Trump administration, said Tom di Galoma, managing director of trading at Seaport Global Securities.

“People are starting to believe that Donald Trump is good for the economy, which makes him not so good for the bond market,” di Galoma said. “You’ve also had the stock market come back overnight. People are starting to realise that a Trump presidency is not the end of the world.”

— AP