Warning equity rally may be short lived on Trump victory

Ed Smith, asset allocation strategist at Rathbones, has warned developed market indices, which have performed well since Donald Trump's US election win, are only experiencing a short-term rally before the negative aspects of his victory begin to hit home.

Since close of business on 8 November, just before the result was announced, the S&P 500 has risen by 2.8% in dollar terms, according to FE.  The index also reached record highs alongside the Nasdaq, Dow Jones and Russell 2000 on 21 November, on the back of positive sentiment towards Trump's spending plans. Smith (pictured) said flash surveys suggest investors believe Trump will cut corporate tax and boost infrastructure spending during his first 100 days in office, but warned they are forgetting the negative sides of his policies. He said: "The Republican Congress is fiscally hawk...