Trump’s win with a clean sweep was a surprise, and one that recalibrates the investing world. Most UK media, right or left expects we want to hear ongoing condemnation of Trump and by extension Republican policies; not me, I think those policies pull the world back from the brink.

Why was I surprised? The market and polls (at least the serious ones), had him winning, but not the media. On election night CNN, which was otherwise brilliantly forensic, seemed upset at the New York Times calling it for the Republicans, quite late on in the process; facing reality had somehow become betrayal. Only ITV, to my mild surprise, was in the real world, giving us the facts, like old style journalism, first.

Just history? Not quite, because the investment media is still making the same mistake. Affluent Harris supporters are lining up, not to deny the result, but to concoct fantastic negatives.  The resulting general doom is leaking into markets, blaming unenacted Trump policies (and indeed they are un-enactable for two more months) for rates hardening and a change of future Federal Reserve policies!

Nonsense, I would have said.  The Federal Reserve will keep behaving as it has, all along – data dependent, rear view mirror stuff.

BRAVE NEW WORLD

So, what does change? Fundamentally it breaks the pack, the investable world was largely of one, foolish mind, that COVID, Ukraine, Climate Change and De-globalisation could all be funded, free, by simply raising debt and tax. There was an assumption of no impact on growth or competitiveness or consumption.

At last, we have the dominant global market saying otherwise. Now the ESG fanatics, armchair war mongers and de-globalisation crowd, must think again; they must pick their fights.

The world has long grown weary of American wars, fought on non-American soil. The idea given everything else, of the mighty EU military (yes, that one), stepping in, is risible.

Maybe we get no immediate peace, but the noise volume (and casualty toll) will drop sharply. A small mercy.

TRADING BLOWS

That Trump is full on for de-globalisation, is remarkably stupid.  And so is China believing it can swamp the world in subsidised over-production for ever. Since it is unlikely that despite various efforts the WTO can be fixed anytime soon, this will continue to be a sporadic issue.

The long run trend to price American workers out of global markets will continue, which given America’s other advantages, is a relief for the rest of the world. But I also doubt if much of what China has produced becomes truly uncompetitive, even with a 60% tariff.

We can look forward to more spats, tariffs on rye whisky and smoked salmon – that kind of thing. Locally damaging, but I doubt if in the end it does much.

Meanwhile the big Biden era protectionist schemes, his beloved IRA and the cute but pricey CHIPS Act, both loathed in Europe, will be sensibly reined in, taking a fair bit of the heat out of trade matters.

MORNING IN AMERICA

Nor despite the panic over RFK Jr., do I have unusual fears for the pharma industry, about the most regulated  sector on the planet, already facing long term persistent attacks on high margins for new drugs. This certainly needs fixing. But I am somewhat doubtful that the Senate will confirm RFK Jr.

From an investor point of view, less anti-trust activity looks a win, assuming Khan goes. While I can see anti-monopoly action against the Tech giants rumbling on, Trump is not a fan of them in general, I now don’t see break-ups as likely.

And some of the ridiculous barriers to the extractive industries will come down, that have encouraged Americans to source raw materials from far less regulated and more polluting places, which can only be positive.

LABOUR MARKETS

What of the labour market? Here too deregulation will release a lot of direct jobs, by allowing business to produce more efficiently, and can be expected to release excess regulators (is there another kind?) onto the market too.

I can’t see real migrant deportations, outside those with criminal convictions, rising much, and there will always be Democrat States undermining the effort, even if attempted. The place to control illegal migration, is always at the border, or close by. Biden let migration soar to four million over his term, against Trump’s one million.

If Trump can get back to that lower level, given the pressures, he will have done well.

Deregulation and AI will improve labour use, but labour shortfalls from lower migration will cut supply, so the outcome is not clear, either way. But the migrants are not generally taking skilled professional jobs on arrival, which is where current wage inflation is.

PAIN IN THE WALLET

What of taxation? Trump will be very keen to keep those tax cut promises. I think some cuts can be funded, and in the end, Congress will want those too, before the midterms.

But full on, deficit exploding? Not likely.

We still don’t have Trump’s main economic picks. The Fed Chair will retire, on schedule (not early), to great applause, despite the noise to the contrary. I doubt if his replacement comes from outside the current Federal Reserve Board. A left field choice could upset markets, which Trump has been reluctant to do.

In summary although there is still a bias against Trump’s America, in fashionable media and on the investment sales teams, I think it is like their views on the election itself, largely reflected noise.

The world they would like, not the world that is. There is a lot of discussion on why this happened of course.

And whatever pose they strike for the media, fund managers, at the core, know low tax, with economic growth, is balanced. The opposite, high tax and no growth is not. Long term returns flow from that.

That will be good for the global economy too.