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Maintain Economy ― What rate would make American business?

Considering the importance of the outcome of the presidential election race in the USA, from the point of view of influence not only on the dynamics of the American financial sector, but also the dynamics of global financial markets, it makes sense to evaluate the results of yesterday’s primaries. About it says in the program «Replica» economic analyst Grigory Beglaryan.

In the United States announced the results of «super Tuesday» — an important stage of the race. Leaders in the Republican — billionaire Donald trump. The Democrats have convincing wins former U.S. Secretary of state Hillary Clinton.

History shows that in periods when the White house may change party administration, and also is the eighth year of a presidential term, the American and world financial markets usually have a fever, and the first half of the election year is the worst for stock sector. Taking into account the additional factors of instability (Chinese turmoil, falling oil prices and risks of a rate hike from the fed) is the current presidential campaign in the U.S. could provoke more turbulence than usual.

Therefore, it is necessary to keep in mind that right now most investors are afraid of uncertainty, and the faster will be clear to the prospects of a particular candidate to become the only nominee from his party, the more likely that the campaign will not have such a negative impact on financial markets, as it was in previous years.

The so-called super Tuesday demonstrated an impressive victory of Hillary Clinton in the Democratic primary, and more likely that Mrs. Clinton will be nominated as a candidate for the presidency from the Democrats.

The fight in the camp of the Republican party is more intense, and despite the obvious success of Donald trump over their rivals, it’s still early to draw conclusions, he already had secured the right to run for the presidency from the Republicans. However, the chances of Mr. trump to become the Republican nominee for President of the United States became very high, and therefore it is already possible to consider which of these two «worthy candidates» are preferable to financial markets.

Despite the fact that changing one or another of the White house (that is, the coming to power of Democrats or Republicans) is, in principle, changes little both for internal and external policy of the USA, we must bear in mind that the current American elections take place in the context of the global economic crisis, which will inevitably affect the United States economy.

On the one hand, if to weigh the odds of Clinton and trump in the battle, like how it is that the prize in the form of keys from the White house should look to Mrs. Clinton, and at least she is now a favorite among American bookmakers taking bets on the outcome of the presidential campaign. Moreover, if to compare indicators of bookmakers with surveys among managers of the largest investment funds, it turns out that the sharks on wall street too, almost confident in the victory of Mrs. Clinton’s trump.

However, it should be noted that, despite the confidence of financial business in the success of Clinton in the confrontation with Mr. trump, among the investment community doubt that the arrival in the White house «new old Democrat» would mean the preservation of stability in the economy. Moreover, in recent years began to change the mood of the representatives of the industrial business the US, which is not quite certain that Mrs. Clinton will need to carry out business policy. While most campaign promises trump meets the expectations of industrial business, since his program involves the stimulation of the real sector of the economy, not pumping the money wall street.

The fact is that, despite all the extravagant statements of trump about his future domestic policy, the electoral program meets all the «standards» of the Republican party platform. If you look carefully on key points of the proposals of the candidate, it turns out that, in fact, the election program focused on the revival of the former industrial capacity of America and support for the real economy in the form of significant tax cuts.

As for the program in Clinton, in my opinion, the main points very strongly smack of the socialization of America and, in fact, continue the work of current President Obama. In the first place alerted Clinton promises to dramatically increase the minimum salary level (from $8 to $12), and although, on the one hand, in case of realization of this promise, we can expect a jump in household consumption, but, on the other hand, such measures will lead to significant losses for the real economy, as it will increase business costs, and the labour market may lose elasticity.

In other words, the victory of Clinton and realization of its promises to increase the number of middle class by increasing wages can be devastating for the U.S. economy. Therefore, choosing between trump and Clinton, American business is worth a hundred times to think what will happen if America will continue to shift in the direction of socialization, and not to return to its roots of American capitalism.

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