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Stock markets edge higher ahead of election results – business live Stock markets edge higher ahead of election results – business live
(35 minutes later)
7.45pm GMT
19:45
Here’s a neat graph showing how the US stock markets pushed higher today after VoteCastr said Hillary Clinton was leading in key states like Florida (even though we don’t know how accurate its system actually is)
Traders ascribed a late-morning spike in the stock market to new, real-time election projections: https://t.co/QuVs5hphAe pic.twitter.com/40e0BHnbcv
7.43pm GMT
19:43
Standard Life: What the election will mean for the Fed
Dominic Rushe
Jeremy Lawson, chief economist at Standard Life Investments, has just published a note about the implications of a Trump or Clinton victory.
If Hillary takes the White House the Lawson says the status quo will be maintained. There’ll be gridlock in Washington but the economy will maintain its slow but steady recovery, and the Federal Reserve could hike borrowing costs next month.
He writes:
“ In this ‘status quo’ outcome the combination of a healthier economy and reduced policy uncertainty should allow the Fed to recommence normalising interest rates at its December meeting, though the pace of rate increases will remain gradual.”
But if Trump wins...
“Donald Trump’s election would introduce more uncertainty to the outlook for government policy, economic activity and the Fed, though those risks are not all to the downside. Initially, considerable market volatility is possible but it is actual policy decisions that will dictate the trajectory for the economy.”
Lawson is betting Trump’s tough trade talk is largely hot air and if he cuts regulation on the finance, energy, telecoms and healthcare sectors, that could boost earnings.
“If, on the other hand, a President Trump turns out to be serious about pursuing a much more protectionist policy agenda, the negative consequences for economic activity and corporate margins could easily offset the benefits of fiscal easing, preventing the Fed from tightening policy for some time.”
7.34pm GMT
19:34
The Wall Street Journal is also reporting that the live voting data produced by VoteCastr is moving the markets.
The WSJ’s Paul Vigna explains:
It’s a first for traders, and for the news media. It has been a longstanding policy for mainstream media to not report on exit-polling data while polls are still open on Election Day, so as to avoid discouraging voters in western states from voting.
Today, though, websites Vice and Slate plan on providing what they are characterizing as “live” voting projections throughout the day.
To be sure, this is an experiment, and a controversial one. Regardless, the numbers are being put out there, and the market is noticing. With the Slate data showing Hillary Clinton leading in several key swing states, stocks have shot higher and bonds have fallen.
Right now, VoteCastr are giving Clinton a four point lead in the crucial state of Florida, with 48% of support vs Trump’s 44%. If the Democrats do claim Florida, it’s hard to see a Republican victory.
BUT (and it’s a big one), realtime polling forecasts are still somewhat experimental. If early voters aren’t representative of the electorate, then their projections could be skewed, for example.
Some websites are tracking "live" voting projections. It's toying with the stock market, @paulvigna writes: https://t.co/VlsSTFBhsh
7.20pm GMT
19:20
Mexican peso hits two-month high
The Mexican peso has hit a two-month high today, which also suggests investors are predicting defeat for Donald Trump.
The peso has rallied to 18.4195 against the US dollar, from 18.58/$1 last night, a gain of 1% or so.
The peso has been very sensitive to Trump’s electoral prospects, given his attacks on Mexicans and opposition to the North American Free Trade Agreement.
Updated
at 7.24pm GMT
7.06pm GMT7.06pm GMT
19:0619:06
Another handy map showing when the polls close across America (add five hours for UK timing):Another handy map showing when the polls close across America (add five hours for UK timing):
When Does the Voting End and the Vote Counting Start? (via @WSJ) pic.twitter.com/pwaJAzM43pWhen Does the Voting End and the Vote Counting Start? (via @WSJ) pic.twitter.com/pwaJAzM43p
7.05pm GMT7.05pm GMT
19:0519:05
The VIX ‘fear’ index has fallen by 4.5% today, in another sign that US investors are looking forward to the end of the election (and who can blame them?)The VIX ‘fear’ index has fallen by 4.5% today, in another sign that US investors are looking forward to the end of the election (and who can blame them?)
6.50pm GMT6.50pm GMT
18:5018:50
Dow Jones rises higher....Dow Jones rises higher....
The US stock market is creeping higher and higher in mid-afternoon trading, as investors cautiously anticipate that Hillary Clinton will celebrate victory tonight/tomorrow.The US stock market is creeping higher and higher in mid-afternoon trading, as investors cautiously anticipate that Hillary Clinton will celebrate victory tonight/tomorrow.
The Dow Jones industrial average is now up 124 points, or 0.67%, at 18,382.The Dow Jones industrial average is now up 124 points, or 0.67%, at 18,382.
The S&P 500, the broader measure of the US stock market, has gained 0.5%.The S&P 500, the broader measure of the US stock market, has gained 0.5%.
According to CNBC, the Dow is on track for its best two-day rally since the Brexit vote (it jumped by 371 points yesterday).According to CNBC, the Dow is on track for its best two-day rally since the Brexit vote (it jumped by 371 points yesterday).
Stocks greet Election Day with best two-day run in months https://t.co/ZnautZJYAS via @tradingnationStocks greet Election Day with best two-day run in months https://t.co/ZnautZJYAS via @tradingnation
The news that Guam voters have (symbolically) backed Clinton is one factor.The news that Guam voters have (symbolically) backed Clinton is one factor.
Another factor is that analytics company VoteCastr says Clinton has the edge in some key swing stages, including Florida. But they also caution that it’s early days, with plenty of votes still to be cast.Another factor is that analytics company VoteCastr says Clinton has the edge in some key swing stages, including Florida. But they also caution that it’s early days, with plenty of votes still to be cast.
UpdatedUpdated
at 6.52pm GMTat 6.52pm GMT
5.48pm GMT5.48pm GMT
17:4817:48
#Stocks up, #USD up, #Gold down. Markets betting on a Clinton win = makes me worried. exact same pre-Brexit pattern. #USElection2016#Stocks up, #USD up, #Gold down. Markets betting on a Clinton win = makes me worried. exact same pre-Brexit pattern. #USElection2016
5.38pm GMT5.38pm GMT
17:3817:38
Dominic RusheDominic Rushe
A reason for caution about trying to predict the outcome of all this. Dominic Rushe writes:A reason for caution about trying to predict the outcome of all this. Dominic Rushe writes:
If you want to know why investors are nervous, look at Ohio. President Barack Obama won the state in both 2008 and 2012 but the polls are giving Trump the edge this year. It’s one of a number of formerly Democrat leaning states where many blue collar voters feel left behind by Democrats.If you want to know why investors are nervous, look at Ohio. President Barack Obama won the state in both 2008 and 2012 but the polls are giving Trump the edge this year. It’s one of a number of formerly Democrat leaning states where many blue collar voters feel left behind by Democrats.
I was in Youngstown, Ohio last week talking to business leaders and they are deeply unhappy with Obama’s legacy and worried that Clinton will just be more of the same.I was in Youngstown, Ohio last week talking to business leaders and they are deeply unhappy with Obama’s legacy and worried that Clinton will just be more of the same.
They blame trade policies for the collapse of industry; this used to be steel country. And Obama’s green fuel initiatives for the collapse of the coal industry. Unemployment in Youngstown is 6%, a full percentage point above the national average, and rising. “I’d vote for Donald Duck before I’d vote for her,” Bill Strimbu, president of local trucking firm Nick Strimbu, told me.They blame trade policies for the collapse of industry; this used to be steel country. And Obama’s green fuel initiatives for the collapse of the coal industry. Unemployment in Youngstown is 6%, a full percentage point above the national average, and rising. “I’d vote for Donald Duck before I’d vote for her,” Bill Strimbu, president of local trucking firm Nick Strimbu, told me.
Youngstown, OH voting @realDonaldTrump for fear of @HillaryClinton https://t.co/DbugW81YFu pic.twitter.com/w12D4heVDLYoungstown, OH voting @realDonaldTrump for fear of @HillaryClinton https://t.co/DbugW81YFu pic.twitter.com/w12D4heVDL
UpdatedUpdated
at 5.40pm GMTat 5.40pm GMT
5.20pm GMT5.20pm GMT
17:2017:20
European markets edge higher on election dayEuropean markets edge higher on election day
There is nervousness among investors as the US votes for its next president - the spectre of the Brexit vote and the complete inaccuracy of the polls there is still fresh in the memory - but European markets have managed to end in positive territory.There is nervousness among investors as the US votes for its next president - the spectre of the Brexit vote and the complete inaccuracy of the polls there is still fresh in the memory - but European markets have managed to end in positive territory.
The news from Guam, a positive sign for Hillary Clinton, has given US markets a lift and helped push Europe higher too. The final scores showed:The news from Guam, a positive sign for Hillary Clinton, has given US markets a lift and helped push Europe higher too. The final scores showed:
On Wall Street, the Dow Jones Industrial Average is currently up 118 points or 0.65%.On Wall Street, the Dow Jones Industrial Average is currently up 118 points or 0.65%.
4.58pm GMT4.58pm GMT
16:5816:58
Here’s a traders guide from Goldman Sachs to what is likely to happen when as the election results come in, courtesy MarketWatch:Here’s a traders guide from Goldman Sachs to what is likely to happen when as the election results come in, courtesy MarketWatch:
A trader’s guide to watching the election, courtesy of Goldman Sachs: https://t.co/Yov494fMfGA trader’s guide to watching the election, courtesy of Goldman Sachs: https://t.co/Yov494fMfG
UpdatedUpdated
at 4.58pm GMTat 4.58pm GMT
4.47pm GMT4.47pm GMT
16:4716:47
Markets boosted by Guam voting for HillaryMarkets boosted by Guam voting for Hillary
An early positive sign for Hillary Clinton - she has been backed in the tiny US island of Guam:An early positive sign for Hillary Clinton - she has been backed in the tiny US island of Guam:
US stock markets are soaring and USDJPY has popped above 105.00, after Guam results are announced - they voted overwhelmingly for #ClintonUS stock markets are soaring and USDJPY has popped above 105.00, after Guam results are announced - they voted overwhelmingly for #Clinton
Worth noting - even though Guam doesn't have any electoral college votes, it has predicted the winner of each Presidential race since 1980Worth noting - even though Guam doesn't have any electoral college votes, it has predicted the winner of each Presidential race since 1980
The Dow Jones Industrial Average, after drifting lower in early trading, is now up 72 points or 0.4%.The Dow Jones Industrial Average, after drifting lower in early trading, is now up 72 points or 0.4%.
UpdatedUpdated
at 5.05pm GMTat 5.05pm GMT
4.25pm GMT4.25pm GMT
16:2516:25
Would a Trump victory result in parity on EURUSD within 12 months? @Barclays think so. pic.twitter.com/9VfTZf8S59Would a Trump victory result in parity on EURUSD within 12 months? @Barclays think so. pic.twitter.com/9VfTZf8S59
4.12pm GMT4.12pm GMT
16:1216:12
More on how markets would react to either Hillary Clinton or Donald Trump winning today’s election. John Higgins at consultancy Capital Economics said:More on how markets would react to either Hillary Clinton or Donald Trump winning today’s election. John Higgins at consultancy Capital Economics said:
A victory for Hillary Clinton in the presidential race was heavily discounted on the day of the vote. So we doubt that there will be much of a response in the markets today if she has triumphed. But a win for Donald Trump could cause major upheaval.A victory for Hillary Clinton in the presidential race was heavily discounted on the day of the vote. So we doubt that there will be much of a response in the markets today if she has triumphed. But a win for Donald Trump could cause major upheaval.
For example, a victory for Trump would probably send the dollar down sharply against other “majors”, particularly the Swiss franc and the Japanese yen. We would expect the yen/dollar exchange rate to break below 100, compared to a current level of nearly 105. We would also anticipate a sharp rise in the dollar against some emerging market currencies. For example, the Mexican peso could hit 25/$, versus 19/$ or so now.For example, a victory for Trump would probably send the dollar down sharply against other “majors”, particularly the Swiss franc and the Japanese yen. We would expect the yen/dollar exchange rate to break below 100, compared to a current level of nearly 105. We would also anticipate a sharp rise in the dollar against some emerging market currencies. For example, the Mexican peso could hit 25/$, versus 19/$ or so now.
In our view, a Trump win would also have large effects on equities. For example, we think the S&P 500 would fall below 2,000, compared to a current level of around 2,130. And many stock market indices elsewhere would probably fare worse. The Nikkei 225 could be hit especially hard by accompanying strength in the yen – we wouldn’t be surprised if it tumbled below 15,000, versus a current level of more than 17,000. And there would probably a broad-based rout in emerging markets.In our view, a Trump win would also have large effects on equities. For example, we think the S&P 500 would fall below 2,000, compared to a current level of around 2,130. And many stock market indices elsewhere would probably fare worse. The Nikkei 225 could be hit especially hard by accompanying strength in the yen – we wouldn’t be surprised if it tumbled below 15,000, versus a current level of more than 17,000. And there would probably a broad-based rout in emerging markets.
We suspect that US Treasuries would rally if Trump won, with the 10-year yield falling to 1.5% from around 1.8%. Admittedly, he has talked about defaulting on the national debt, has a fiscal plan that includes unfunded tax cuts and has proposed trade tariffs that would boost inflation. But a plunge in risky asset prices would prompt a reassessment of the near-term outlook for Fed policy and boost the demand for safe havens.We suspect that US Treasuries would rally if Trump won, with the 10-year yield falling to 1.5% from around 1.8%. Admittedly, he has talked about defaulting on the national debt, has a fiscal plan that includes unfunded tax cuts and has proposed trade tariffs that would boost inflation. But a plunge in risky asset prices would prompt a reassessment of the near-term outlook for Fed policy and boost the demand for safe havens.
Meanwhile, the initial uncertainty following a victory for Trump would surely undermine the prices of industrial commodities, including oil and base metals, while gold would benefit from a renewed burst of safe-haven demand. In the short term, therefore, we would expect crude oil to fall to around $40 and gold to surge to at least $1,400. The impact of the dollar is a further wildcard. A big fall in the value of the US currency would limit the downside for the dollar prices of industrial commodities, while adding to the upside for gold.Meanwhile, the initial uncertainty following a victory for Trump would surely undermine the prices of industrial commodities, including oil and base metals, while gold would benefit from a renewed burst of safe-haven demand. In the short term, therefore, we would expect crude oil to fall to around $40 and gold to surge to at least $1,400. The impact of the dollar is a further wildcard. A big fall in the value of the US currency would limit the downside for the dollar prices of industrial commodities, while adding to the upside for gold.
3.31pm GMT3.31pm GMT
15:3115:31
Back with the presidential election, and if Hillary Clinton wins, it would give a green light to the Federal Reserve to raise US interest rates in December, says Kathleen Brooks, research director at City Index:Back with the presidential election, and if Hillary Clinton wins, it would give a green light to the Federal Reserve to raise US interest rates in December, says Kathleen Brooks, research director at City Index:
Markets have rushed to price in a rate hike from the Fed in recent days, the current implied probability of one 25 basis point hike next month is 82%, up from 68% a week ago. This is a sign that markets are confident that Hillary Clinton will win the US Presidential election tonight. It also suggests that should she lose the election and Trump win, there could be a major readjustment in financial markets, with Fed rate hike expectations falling sharply, a dramatic fall in US bond yields, and a decline in the US dollar.Markets have rushed to price in a rate hike from the Fed in recent days, the current implied probability of one 25 basis point hike next month is 82%, up from 68% a week ago. This is a sign that markets are confident that Hillary Clinton will win the US Presidential election tonight. It also suggests that should she lose the election and Trump win, there could be a major readjustment in financial markets, with Fed rate hike expectations falling sharply, a dramatic fall in US bond yields, and a decline in the US dollar.
...While we think a Clinton win is more likely, we are still gearing up for major financial market volatility if this proves not to be the case....While we think a Clinton win is more likely, we are still gearing up for major financial market volatility if this proves not to be the case.
Our clients also appear fairly confident about a Clinton win, however, this is reflected more in their foreign exchange positions than in their stock market positioning. Our clients are long the US dollar in the lead up to the election result, and 75% of clients trading dollar/yen are long. The fact that our clients are willing to short the yen at this stage, suggests that they do not see a shock election result from the US.Our clients also appear fairly confident about a Clinton win, however, this is reflected more in their foreign exchange positions than in their stock market positioning. Our clients are long the US dollar in the lead up to the election result, and 75% of clients trading dollar/yen are long. The fact that our clients are willing to short the yen at this stage, suggests that they do not see a shock election result from the US.
Although we expect stock markets to stage a relief rally if we see Clinton win the White House later today, we believe that any stock market rally is likely to be short-lived, as markets instead focus on the risk of rising bond yields and a Fed rate hike in a few weeks, which could be bad news for stocks into the end of the year.Although we expect stock markets to stage a relief rally if we see Clinton win the White House later today, we believe that any stock market rally is likely to be short-lived, as markets instead focus on the risk of rising bond yields and a Fed rate hike in a few weeks, which could be bad news for stocks into the end of the year.