Mohamed El-Erian on the Election

by Marilou Long on October 26, 2016

in Investment Strategies,politics

I tend to agree with Mr. El-Erian’s thoughts on the market’s reaction to the election in this article from Business Insider.  From the linked article:

Garber: How do you think the election will impact markets?

El-Erian: The greatest impact would come from the materialization, as unlikely as this currently is, of one of the two tails – a clean sweep, with Democrats gaining control of both houses of Congress and of the White House; or, at the other end, Donald Trump winning the presidency and immediately moving to impose punishing trade tariffs on China and Mexico.

If either of these possibilities were to transpire, markets would experience the type of behavior that followed the Brexit referendum in June.

Apart from these two extremes, markets should be able to take the results of the election in stride.

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