Finally It’s the U.S. election day and stock markets open, ForexSQ experts use different sources to provide you the impact of the election day on the Stocks, Commodities, Bonds, CFDs and Forex market.
Election Day Markets Open
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U.S. stocks fell while bonds fluctuated with the dollar as Americans cast their ballots amid polls showing Hillary Clinton narrowly ahead of Donald Trump in the race to the White House.
The S&P 500 Index fell after the biggest rally in eight months, while the dollar and Treasuries were little changed. Mexico’s peso — a barometer for investors’ perception on the U.S. vote — halted a three-day advance, while Turkey’s lira hit a record low.
Emerging-market equities posted a back-to-back gain as Egypt’s EGX 30 Index climbed to the highest since 2008. Oil slumped.
Traders decided to take a more cautious stance as they awaited the results of the U.S. presidential election. The two candidates have spent the past few days campaigning in key battleground states as polls showed the race had tightened. Still, state-by-state surveys indicate a narrow lead for the Democratic contender. On websites that take bets on the presidential victor, Clinton’s odds of winning the White House are generally about 80 percent.
“It’s not a surprise we’re pulling back after the huge move yesterday,” said Matt Maley, an equity strategist at Miller Tabak & Co. LLC in New York. “A lot of people are just going to sit on their hands. The people who covered shorts and went long yesterday are probably wanting to take a few profits today. Even if it becomes more and more evident that Hillary Clinton is going to win, the upside is going to be a little limited because of the move yesterday.”
Speculation on Clinton’s chances also helped bolster odds on a Federal Reserve interest-rate increase next month.
Election Day Stock Markets
The MSCI All Country World Index declined 0.1 percent at 10:12 a.m. in New York, following the biggest advance in four months. Health-care, financial and energy companies led losses in the broader gauge.
The S&P 500 slipped 0.3 percent to 2,124.62, after a surge Monday that was sparked by the FBI reiterating that Clinton’s controversial handling of her e-mails wasn’t a crime.
The U.S. stock measure has been unable to push higher since reaching a record in August, wandering in a roughly 100-point band as investors assessed the political landscape, corporate profits and economic data. It hasn’t climbed for three consecutive sessions in more than month, and on Friday capped its ninth straight daily drop — its longest losing run since 1980. Still, the gauge closed Monday less than 3 percent from its all-time high.
Amid the political drama, earnings season is winding down, with only a handful of S&P 500 members releasing Tuesday. Analysts now predict earnings growth of 2.5 percent in the July-September period for the benchmark’s constituents, reversing forecasts for a 1.6 percent decline at the start of the month. Retailers Macy’s Inc., Kohl’s Corp. and Nordstrom Inc. are due to report later this week.
The Stoxx Europe 600 Index slipped 0.2 percent, erasing an early advance. ArcelorMittal tumbled after the world’s biggest steelmaker warned that a surge in coal prices would hurt earnings in the last three months of the year. Marks & Spencer Group Plc declined after the retailer said it plans to close all its stores in 10 foreign countries and shutter 30 outlets at home. Credit Agricole SA rose after the French bank said quarterly profit doubled from a year earlier and bond-trading income surged.
The MSCI Emerging Markets Index headed for the steepest two-day rise in more than six weeks and Egyptian equities rallied for a ninth day as the pound’s float lured investors.
Bonds
Benchmark Treasury 10-year note yields fell one basis point, or 0.01 percentage point, to 1.82 percent. The 1.5 percent security due in August 2026 rose 2/32, or $0.63 per $1,000 face amount, to 97 5/32.
The day after Americans choose their next president, U.S. 10-year yields will either plunge by the most since the U.K.’s June vote to leave the European Union or hold near levels seen this month. Most strategists said yields will fall Wednesday if Trump wins the White House and will remain steady or rise if Clinton prevails.
A Clinton win Tuesday will probably send the yield on 10-year U.S. Treasuries to about 2.6 percent by this time next year, according to Loomis Sayles & Co. Vice Chairman Dan Fuss. A victory for the Democratic candidate would allow the Fed to raise interest rates as many as three times before next November, he said.
“If Clinton wins, the central bank will probably raise rates in December, despite international pressures,” the 83-year-old Fuss said in an interview in Tokyo Monday. “The inflation indicators are definitely picking up, particularly the unit cost of labor.”
European government bonds were little changed Tuesday as investors waited for the outcome of the U.S. presidential election. German 10-year bunds yielded 0.15 percent.
Currencies
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The U.S. Dollar Spot Index, which measures the U.S. currency’s performance against a basket of 10 major peers, was little changed. It advanced 0.4 percent Monday, the biggest increase since Oct. 20, halting a six-day losing streak. The greenback climbed 0.3 percent to 104.77 yen, building on Monday’s 1.3 percent surge, the biggest increase since Aug. 26.
A JPMorgan Chase & Co. gauge of expected swings in global currencies fell the most since June on Monday. At the same time, speculators paid higher prices for protection against the dollar tumbling versus the yen — a scenario markets have associated with a surprise Trump victory.
“The market sees a Hillary Clinton victory as dollar-positive while a Donald Trump victory as negative,” said Thu Lan Nguyen, a foreign-exchange strategist at Commerzbank AG in Frankfurt. “It’s doubtful that dollar recovery will continue throughout the day though. The market has learned from the Brexit referendum — while Hillary is ahead in the polls, it’s too close to call.”
Mexico’s peso dropped 0.3 percent, following the biggest rally since Sept. 27.
Commodities
Gold steadied after the steepest slump in a month as the U.S. presidential election got underway, with Goldman Sachs Group Inc. saying Clinton is more likely to win than Trump.
Bullion for immediate delivery added 0.2 percent at $1,284.59 an ounce at 11:29 a.m. in London. On Monday, prices sank 1.8 percent, the most since Oct. 4, on speculation that Clinton’s odds have improved.
“Our economists believe that there is a significant polling deficit for Mr. Trump to overcome in a large number of states, particularly in contrast to Secretary Clinton,” Goldman analysts including Max Layton said in a report received on Tuesday. The Democrat “simply needs to win one of the very competitive states she currently leads — Colorado, Nevada, or North Carolina — and maintain her sizable lead in the others to win.”
Oil fell on speculation that the country’s crude supplies extended a record gain. U.S. crude inventories climbed by 1.5 million barrels last week. Stockpiles rose by a 14.4 million barrels in the week ended Oct. 28, the most ever in weekly Energy Information Administration data.
West Texas Intermediate for December delivery declined 0.9 percent to $44.47 a barrel on the New York Mercantile Exchange. Brent for January settlement slipped 1 percent to $45.67 a barrel on the London-based ICE Futures Europe exchange. ForexSQ experts use Bloomberg as source.
