The stock market is betting that Clinton will gain a landslide victory over her opponent, real estate mogul Donald Trump. Investors in Wall Street are placing their bets against the Republican candidate, though bankers in New York are traditionally GOP-friendly. Clinton`s victory will not be close, according to the market, which has already decided to give Clinton a vote of confidence. The fact is that the S&P has risen higher than 4% since July 5, which means that the market is confident that Clinton will easily win the presidential election.
Sizable Lead
Clinton has a sizeable lead over Trump, which Wall Street is expecting it to increase over time. In fact, the famous Iowa Electronic Markets gave Clinton an eighty percent chance of defeating Trump. The IEM is a research-purposed futures market operated by a college in Iowa. When the S&P fell during the 3 months before the election, it meant that the U.S. President would be replaced 86% of the time. In fact, Clinton is leading Trump in most states of the American union. On Aug. 15, the SPX hit a record high and was poised to continue its upward trend for six months in a row.
Even the Dow is flirting to experience gains in August, and this could be the seventh rise in a row per month. The market is also expecting almost no change in policy and a split Congress over time. A gridlock might happen to the U.S. political landscape, which means that there is little chance of a change in the fundamental economic policy. So investors tend to expect weaker dollars and lower interest rates in the foreseeable future in America. The dollar is gaining weight while the stocks are drifting lower today.
Drifting Lower
The trading volumes of the U.S. markets have been rather light just ahead of the monthly report. Since investors are expecting the FED to raise interest rates, stocks in the U.S. slipped Tuesday. Today, trading has been rather quiet after Janet Yellen hinted at raising interest rates next month. Both the Dow and the S&P fell today, weighed down by the important utility shares. These types of shares have benefitted a lot this year as investors expect that interest rates should be low. In addition, the NASDAQ Composite also fell.
As you can see, the U.S. market fell today. Investors are expecting an increase in interest rates in the next couple of months, as the Fed`s chair has hinted at this for the past couple of years. The dollar is stronger and investors are confident Clinton will win the presidential election in November. The stock market in America has risen significantly over the past couple of months, which means that investors are looking to support a Democrat in the White House. The Dow also rose steadily in the past months, which means that investors have put strong confidence in the American stock market. A weaker dollar is expected in the long haul, which implies the Democrat candidate is expected to be the next President of the United States.
Disclosure: I do not own any shares or any stocks mentioned in this article.
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