Leading up the U.S. election, Michael Greenberg was defensive in his portfolio. He pointed to the growing divide between wealthier Americans, who have benefited from the modest economic rebound, and lower-income voters who feel left out.

We caught up with Greenberg, portfolio manager for Franklin Templeton Solutions, for a post-election recap.

Here’s what to expect in the U.S. and Canada under the Trump presidency, and a look at why he won.

Q: What led to Trump’s victory, and what should we expect?

A: There are a lot of disadvantaged people in the U.S. and [the election] shows these people didn’t want the status quo. [President-elect] Donald Trump put off many voters through some of his views and behaviours, but the vast majority of America feels left out and like they haven’t participated in the rebound we’ve seen since 2008, and those people spoke with their votes.

Further, […] the U.S. is one of the worst [countries] as far as helping support those who have been put off by globalization; think about training workers to help them prepare for the new economy and how [little] of GDP is spent on this.

What [his win] means is some of his pro-growth policies may come through. Those include:

  • tax reform;
  • repatriation of corporate foreign earnings;
  • infrastructure spending; and
  • potentially less [stringent] government regulation of some industries, like energy and financials.

[The Republicans] have a majority at all levels of government, [so] you could see a bit of action on some of [those items]. It’ll also be interesting to [watch what] Paul Ryan’s [moves] will be going forward. You could see some of [Trump’s] reflationary policies toned down from pre-election talks. [Editor’s note: CNN reports Ryan was quick to “set aside the public feud with President-elect Donald Trump and pledge to work together.”]

Q: What’s next for the U.S. market and economy?

A: [As of November 9th], markets are up and bonds are down, and it’s an inflationary day. But one day doesn’t make a trend.

Over the medium term, you will get potential positives from the market standpoint. You can pencil in [his win] as good for earnings, though it may not be good for price-to-earnings multiples because higher volatility would potentially hurt [those] multiples. That’s obviously a concern for stocks, but it’s hard to make strong conclusion today, so we’ll have to watch who [Trump] aligns with and who’s working with him.

Also, the potential scope and size of immigration [changes], trade wars and geopolitical tensions are hard to read.

[Still], we should expect market volatility [even though] the VIX has been down today. [As of 1:40pm on November 9th, the VIX was down by 15%]. It is quite low; lower than its three-day reading. But that could be short-term, as there were a lot of people hedging the Trump outcome prior to election night. If you consider the fact that [he won] and we didn’t get as adverse a market reaction as we thought, some people might be getting covered by that hedging. However, [that] could just be market technicals and, in the medium to long term, volatility could be a little bit higher.

Q: What are some of the risks and opportunities for Canada?

A: The big concern for Canada is trade, as the U.S. is our largest trading partner and Trump has talked about ripping up NAFTA. He won’t be able to do that—I don’t think Congress would repeal NAFTA—but what you could see is change in trade protection policy. That could be an issue. Now, globalization has played out over decades. So this trend toward trade protectionism isn’t going to happen overnight either; it could take years.

Trump isn’t also buying into the environment problems that we have in the world. He’s very much [in support of] energy. [For example], he’s talked about being in favour of the Keystone XL pipeline and that might be good for certain sectors of the Canadian economy, with energy being a big one for us. That may offset some of the potential headwinds from more trade-related issues.

The other potential positive is that the Bank of Canada and the government have been trying to support the economy. The BoC has tried to step aside a bit to let fiscal policy step through. But if we do see some trade weakness, there’s potential for some more action from the BoC or for more aggressive fiscal measures from the government. I’m not sure what’s driving the market today [As of November 9th at 3:40 pm, the TSX was still up slightly from the previous day]. There are some positives with energy.

Market highlights

Prab Sagoo, associate director at Nasdaq Advisory Services, offers his thoughts on where markets might turn:

  • Uncertainty is likely to bolster gold and the materials sector in the near term.
  • Energy and Financials are likely to benefit from Trump’s pro-oil stance and higher long term rate scenarios.
  • Healthcare is also likely to get a boost, as Clinton’s push for greater regulation in the space retreats.
  • A lower U.S. tax rate versus a higher Canadian tax rate could be negative for Canada’s competitive business position.
  • The Canadian dollar and the peso are weakening against the U.S. dollar.

Katie Keir is Content Editor of Advisor's Edge. Email her at
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