Is the Effect of Political Risk Becoming Overrated on Wall Street

Traditionally, political uncertainty is one of the biggest market movers with effects on the equities, Forex, and commodities market.  Political commentators and Wall Street analysts have drawn up interesting inferences on the effects of political uncertainty on the markets after significant political events such as elections and referendums.  For instance, the prevailing thesis on the effects of political uncertainty on the market is that Americans tend to vote for the same candidate or party if the economy is robust and they tend to vote for the opposition if the economy is weak.

Sam Stovall, managing director at S&P Capital IQ observes that the results of presidential elections shows that  voters tend to give the state of the economy a high weighting in choosing the next president. In his words, “In 82 percent of the times that markets have climbed during August and October, the incumbent party has won. In 86 percent of the times the market has been down, the replacement party has won.”

It is already cliché that the markets hate uncertainty and you can trust Wall Street to have a bullish performance in years when the election results are predictable than in years when the election can swing either way. The market doesn’t usually record much volatility ahead of election in which the incumbent is contesting reelection because the incumbent will most likely win and there won’t be much of a change in economic policies.

However, in the last U.S. presidential election between Donald Trump and Hillary Clinton, the risks of change in economic and foreign policy was high because both candidates had widely different plans. Trump was easily the wild card because his proposed economic and foreign policy plans were ‘unconventional’ and Wall Street analysts were quick to opine that a Trump presidency will bring in a unprecedented level of uncertainty to the markets.

The effect of unexpected political events is muted on the markets

However, the chart above shows how U.S. equities and the volatility index have fared since Trump won the election.  You’ll observe that U.S. stocks have booked gains since Trump won the election on Nov. 8 2016. The S&P 500 is up 10.70%, the NASDAQ Composite is up 12.33%, the Dow Jones Industrials is up 14.14%, and the Russell 2000 (small caps) is up an incredible 15.04%. Conversely, the fear gauge in the market has recorded  a massive drop with the VIX index declining by 38.9% in the same period.

Steve Williamson, an analyst at Lionexo binary options observes that “the performance stocks in relation to the volatility index shows that U.S. equities have not been plagued by the expected volatility that should have resulted in a change in government.”  In essence, it appears that political risk is starting to have a lesser effect on the markets.

Interestingly, 2016 showed many signs indicating that political uncertainty has lesser influence on the markets. For instance, the markets recovered from the shocking Brexit vote in four days despite the fears that the Britain’s exits from the EU might trigger chaos in the Eurozone. The whiplash in U.S. stocks after Trump’s surprise victory didn’t last more than four hours. Italians rejected proposed constitutional changes from Matteo Renzi’s pro-EU government and the effect of the referendum was lost on the Italian market in about four minutes.

Pro-EU market watchers have started drawing inferences on how the results of the upcoming French elections could affect forex markets in the EU, U.S., and the rest of the world. One of the top candidates in the French presidential election, Marine Le Pen has indicated that she’ll drop the use Euro in France – a move that might be the prequel to France’s exit from the EU.

It still a little too early to know if the results of the French elections will have a drastic effect on the market or not. However, based on the recent performance of the markets, we can safely bet that the markets will see a swift correction that will erase any volatility irrespective of how the French vote in the next election.

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Will Travelling to America Become Harder Now that Trump is in Control?

Since Donald Trump has become President, we’ve already seen a huge number of changes implemented, and it is certain to be just the beginning. The most internationally-rocking change Trump tried to implement was the Muslim travel ban, which began as a so-called security measure and instantly resulted in racial profiling. However, the travel-industry tycoon is said to be in favour of America’s tourism, and so it’ll be interesting to see whether travelling to and from America will be made harder by the legislation that the President can make.

Travelling To The United States

The process of entering the United States is already getting more difficult, with the Muslim travel ban being just one of the many legislations that Trump is set to put in place. With the wall supposedly being built on the Mexican border, and the fact that certain groups are likely to be targeted when it comes to visiting the States, there could be a negative impact on tourism in the country.

Visas

Everyone entering the US needs to get some form of visa, but there are a select few countries that benefit from the Visa Waiver Program. This allows certain member countries specified by the US to enter the country without needing to go through a grueling process of interviews and questions, alongside endless amounts of documentation. The Visa Waiver Program allows participants to fill out a US visa application online quickly and easily. 60% of America’s visitors are from countries who benefit from this program, but Trump is still considering making changes to the way that it works. For example, he is considering putting ideological tests into the application, and this could cause some problems for those looking to travel.

Relationship With Great Britain

The majority of America’s tourism comes from countries that benefit from the Visa Waiver program, and that includes Great Britain. Trump has already suggested that the relationship between the US and the UK is a ‘special, special one’ and because of this it is highly unlikely that he will ever place restrictions on British citizens when it comes to travelling to the US. However, the calm waters may be rippled by a storm as the UK government have been forced to debate whether they should even allow the President to come to the UK on a state visit, after a petition of over 2 million people demanded that he was banned. This special relationship between the two countries could ultimately be split, which could lead to much tighter restrictions.

Economy

The dollar fell very quickly in America after Trump was announced President, and while this may have many tourists cheering thinking they can get more for their money, this may mean that the cost of amenities when visiting the US could increase. The state of the economy will be ever changing, and will probably be at its most volatile for a long time under Trump due to the rash decisions he tends to make. Nevertheless, he is set on helping to improve the economy by focusing on infrastructure, and with the proposed plans for better airports, travelling to the US might not be so tough after all.

 

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Tech Firm Giants Reacted To the Alleged CIA Dump

 

Different tech firm giants have given their reaction regarding the allegation that their products have been compromised.  Accounts pertaining to the CIA’s hacking tool can be seen on the considerable amount of documents published at Wikileaks.   The spy agency is being accused of successfully developing methodologies to listen on Smart TV and Smartphone.  As of late, the pages have now surpassed the number of documents related to Snowden.

The statement of Apple contains the most comprehensive detail about the alleged infiltration of the spy agency on their tech.  While they do not necessarily confirm the supposed hacking, they affirmed that there were vulnerabilities on their system and they have already addressed it.  They even claimed that the security of Apple gadgets is the most secured programming available today.  They also added that they are dedicated in maintaining that level of security as time passes by.  The software and the product of Apple are intended to deliver the latest security updates directly to their customers.  According to them, at least 80% of their consumers are using the latest firmware.

Based on the initial analysis conducted by the company, the leaked issues have already been addressed which is all thanks to the latest operating system.  The company also affirmed that they are working fast to track any vulnerabilities and work on them.  They ended their statement by encouraging their customers to download the latest operating system to have an access to their latest updates on security.

Wikileaks also pointed out to Samsung’s F800 series that has been supposedly compromised through a hack based on USB connection.  Samsung did not clarify the alleged hacking, and they just assured the public that they are aware about the news and they are currently looking at the matter.  They also reaffirmed their commitment to protect the privacy of their consumer and the main priority of their device is to give the state-of-the-art security.

Microsoft was also the subject of the Wikileaks which claimed that the spy agency has successfully developed the malware specifically to target the windows operating system particularly the OS running on PC.  They released a statement that is similar to Samsung; again they did not authenticate the alleged hacking of the CIA.

Linux-based operating system was also an alleged victim of the possible hacking of the CIA.  Linux is a widely accessible operating system which is not surprising why it is a common target of most hackers.  Google, in contrast, refused to release a statement or comment on the supposed hacking of the CIA on their android device.

A lot of organizations are now pushing the government to release a detailed response regarding this allegation.  They even exclaimed that it is the government’s duty to protect the privacy and keep the citizen secured.  Unfortunately, the details pertaining to the allegations are doing the opposite.  Turning the gadgets that we use on the regular basis into a weapon is severely damaging.  As of late, CIA has not yet confirmed or denied the allegations.

 

Taking all of this into consideration how safe are you?  Is it time to band together and raise the question  of personal privacy according to our rights?

Consider the 4th Amendment and ask yourself   “Is my government paid  for by tax payers  in the United States Protecting our Civil  Rights

 

What Is The ESTA Visa & How Will The Travel Ban Impact The US

Travelling to America has become somewhat of a complicated process over the years, as unlike many countries around the world, there are a number of visa requirements that must be met, depending on the type of visit the traveler is looking to do. The impact of the 9/11 terrorist attack led to stricter security measures and the implementation of a number of visa procedures that were not in place prior to this.

Since Donald Trump’s presidency, the travel situation has become even harder for citizens of certain countries, or even those with heritage from those countries and dual nationalities. While Trump believes this was put in place in order to try and protect the United States, this was met with international uproar, with many of his own supporters turning against him.

With the monetary benefits of the travel ban being considered by the markets, and the potential future impact on stocks from companies within certain countries that could potentially be named on the travel ban if this was to progress, there are a number of concerns relating to it.

Here, we’re discussing the different visa requirements and how Trump’s travel ban is set to impact the freedom of travel to the country.

Different Travel Visas To Enter The United States

In order to gain access to the United States, there are a number of different options for travelers to choose from.

Firstly, there is the ESTA Visa, which is part of the visa waiver program (we discuss this in further detail below).

Then there is the B-1 and B-2 travel visas, that relate to the different types of travel visa requirements that may be included. Nonimmigrant visas for those travelling for business are classed as B-1 visas. Nonimmigrant visas for those travelling for pleasure, tourism or visiting are classed as B-2 visas.

What Is The ESTA & Visa Waiver Program?

The ESTA Visa (Electronic System for Travel Authorization) is an online system that helps the United States government to determine the eligibility of any travelers looking to head across the border. This system was introduced in 2009, and the concept behind this was to help enhance the security measures. There are a number of eligibility questions that come with the ESTA and this includes things about nationality, passport, criminal history and more.

The ESTA comes as part of the Visa Waiver Program, which is currently specific to 38 countries. The concept behind this is that the government is able to allow certain countries’ citizens access to the United States without having to have a full visa. While these travelers are still vetted with the ESTA application process, meaning travelers who do not pass are required to obtain a full US visa, this can help to ensure that the entire visa process is smoother than ever.

What Is Trump’s Travel Ban?

On January 27th, President of the United States Donald Trump signed an executive order which was aimed at halting any form of refugee admission and temporarily ban travelers from a number of countries around the world.

While this was revoked by a number of judges, this has now been passed and the latest travel restrictions now include North Korea and Venezuela, alongside other countries including Chad, Iran, Libya, Syria, Yemen and Somalia. Sudan was dropped from the travel ban.

 

    Nevertheless, a new travel ban is set to go in place in October 2017, and this could include further revisions.

Will The Travel Ban Impact The US For The Worse?

The initial implication of the travel ban resulted in a huge number of students, professionals and US citizens with dual nationalities being stopped at airports and refused entry to the country. This led to a number of sectors such as the financial trade markets, schools, hospitals and more being put to a halt, as a large number of workers and students were stopped from entering the country.

While the United States Government are adamant that the travel ban will the US in a positive manner, there are some circumstances where this could backfire in the future. With a large majority of people taking part in protests across the country, and a response from around the world which even halted Donald Trump’s state visit to the United Kingdom, there could be a lot of backlash if the travel bans continue.

The Impact On The Markets

A number of political movements since Donald Trump’s presidency has led to volatility in the financial markets. With every legislative decision relating to the travel of tourists and businessmen and women to the country, more businesses are set to close their doors. With recent terrorist attacks and the increase in radicalization amongst European citizens happening across Europe, America may re-evaluate the status of the 38-member countries that currently have access to the United States’ ESTA visa program. This could have even more of an impact not only on the financial industry, but across tourism and a broad range of other industries.