What the Election Means for the Markets

US Markets and Election 2016

What happens to the financial markets after the election? Even more than usual, we have a decent idea.

That’s because there is a clear and recognizable swing has been in a variety of asset prices – particularly the stock market and the currency – at inflection points in the presidential race. A stock market rally on Monday is the latest evidence. The more than 2 percent gain in the Standard & Poor’s 500 appears to be linked to the announcement on Sunday by James Coney, This year the F.B.I. director, an investigation of the newly discovered emails Hillary Clinton unveiled nothingwarranting costs.

Market fluctuations in the course of the elections suggest that with money on the line people and institutions to see a world with Mrs Clinton as president with a less volatile economic and financial environment than one with Donald J. Trump in charge.

It’s a risky game to try to match fluctuations in the financial markets to political news. Markets often rise and fall for reasons that have nothing to do with the main headlines of the day. And Monday rally was an isolated event, it would be safer to attribute to chance than to collective judgment of the market of the future in the context of the two potential presidents.

But in this election cycle, there is a clear pattern in which the odds shifted moved into the race and the different financial indicators have been in a consistent direction. Good news for Mrs. Clinton’s campaign coincided with higher stock prices, a rally in the Mexican peso and a reduction in the expected volatility of the equity markets. Good news for Mr. Trump coincided with the reverse swings. (The impact on the value of the dollar and government bonds are less clear.)

This movement was evident when audio emergence of Mr. Trump making vulgar remarks about women and Mrs. Clinton had strong debate performances. It went in the opposite direction when Mr Coney on October 28 that the researchers obtained new emails linked investigations were indicated to Mrs Clinton.


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