Let’s assume Trump wins or at least the market re-prices his chances of winning. What would a President Trump do and how would asset prices respond? It’s a question worth asking, but not an easy question to answer given that Trump describes himself as ‘totally flexible on very, very many issues’.
The US corporate credit cycle seems to have turned with rising bad loans leading to banks tightening corporate credit conditions. This can be self-reinforcing. So I send a 'yellow card' warning to investors that we're 70 minutes into the match and we could see a recession in 2018.