11:35 p.m. ET: Markets around the world are beginning to price in a Donald Trump victory, as the Republican nominee’s path to the presidency becomes more likely by the hour. U.S. stock futures plunged, with futures on the Dow Jones Industrial Average falling 792 points, or over 5.1%.
At the open of trading, stocks in London were plunging over 4.3%, while losses accelerated for Asian markets. The Hang Seng Index in Hong Kong tumbled 2.97%, the South Korean Kospi fell 3.4% and the Japanese Nikkei 225 was down 4.7%. Australian and New Zealand markets fell by a similar measure.
Fear proxies like the U.S. dollar, gold and government bonds surged. Gold rose $40 to $1,316 a troy ounce, or over 3.4%. Ten-year U.S. Treasury note yields fell 12 basis points to 1.73%, indicating an investor flight to the safety of government bonds.
The Mexican peso, the asset that has swung most violently depending on prospects for the presidential vote, plunged. On Tuesday, as Democratic nominee Hillary Clinton showed strength in early voting, the peso rose to two-week highs. However, it tumbled over 11.3% as of 11:35 p.m. ET after CNN called the state of Ohio, Florida and North Carolina for Trump.
Virginia and Michigan are trending in Clinton’s direction, while Wisconsin is moving in Trump’s favor. Pennsylvania and New Hampshire remain too close to call.
As voting has come in decidedly in favor of Trump, defying the expectations of almost every national poll and many state polls, it was the IBD/TIPP Tracking poll that may have won Tuesday. It predicted Trump’s victory in a final national survey on Tuesday afternoon.
9:53 p.m. ET: Stock futures turned sharply negative and the Mexican Peso plunged against the U.S. dollar, reversing gains as Donald Trump expanded his lead on Hillary Clinton in the state of Florida. At 9:35 p.m. ET it was Republican nominee Trump who was in the lead by roughly 125,000 votes in Florida. The peso plunged over 7.9%, while stock futures were beginning to trade down sharply. Dow Jones Industrial Average futures fell over 489 points, or nearly 3%. Democrat leaning counties such as Broward and Miami-Dade hold most votes remaining to be counted, however over 95% of the vote is in. Fear proxies like gold and futures on the CBOE volatility index are surging as Trump gains a path to the presidency. Gold rose 2.34% after 9 p.m. ET.
CNN has called New York and Connecticut for Clinton, while Trump won three of five electoral votes in Nebraska, in addition to the states of North Dakota, South Dakota and Louisiana. States that are too close to call include North Carolina, Virginia and New Hampshire, while Trump is expanding leads in Ohio, Michigan and Wisconsin. So now it looks like Trump is going into Office, if you trade stocks and you’re thinking this move could affect your trading rates for the worst, have a look at companies like Stocktrades to gain some advice on what stocks to go for to fight against any losses you might have faced.
8:35 p.m. ET: Dow Jones Industrial Average futures pared gains as the state of Florida was up for grabs with over 90% of the vote in. As of 8:35 p.m. ET, Trump was winning Florida by roughly 83,000 votes with 48.9% of the vote versus Clinton’s 48% of the vote. Dow futures, which were up over 100 points, pared gains to 36 points. Trump has won Alabama and South Carolina, according to CNN. Clinton remains in the lead in North Carolina, Ohio and Michigan as the vote begins to come in. The U.S. dollar has begun to strengthen against the Mexican peso, rising 0.7% as Florida has tightened.
8:19 p.m. ET: Stock futures hit session highs after voting results from Florida and North Carolina showed Clinton clinging onto leads with well over half of the vote in. Clinton has won Illinois, Maryland, Delaware, Rhode Island, New Jersey, Washington D.C. and Massachusetts, while Trump has won Oklahoma, Mississippi and Tennessee, according to CNN.
7:35 p.m. ET: Trump has won Indiana, Kentucky, West Virginia, according to CNN. Clinton has won the state of Vermont, while races in North Carolina, Virginia, Georgia, South Carolina and Ohio remain too close to call, according to CNN. Early voting calls caused weakness in Australian stock markets as they opened Wednesday trading, and rising investor jitters reflected by a rally in gold and a 1.1% slump in the Mexican peso versus the U.S. dollar after it closed at two-week highs on Tuesday.
6:05 p.m. ET: Futures for the CBOE Volatility Index continued to fall in trading after the market close, while the Mexican peso continued its surge against the dollar. As of 6:05 p.m. ET, the peso was trading up 0.22% against the dollar. This trading indicates investors have maintained an expectation of a victory by Clinton over Trump.
4:00 p.m. ET: Stocks closed higher heading into U.S. presidential election results with the S&P 500 Index closing up 8 points, or 0.39%, at 2,139. The Dow Jones Industrial Average rose 0.4%, closing at 18,332 and paring some gains near the end of trading. Indications of investor fear such as the CBOE Volatility Index, gold, and the Swiss franc all fell on Tuesday, locking in a two-day risk rally ahead of the election. “The market expectation is a Clinton presidency,” said Joseph P. Quinlan, chief market strategist at U.S. Trust, at the close of trading.
The Mexican peso, the asset most correlated to investor perceptions of who will take the White House, rose 1.2% versus the dollar. Stocks rallied after futures trading opened lower on Tuesday morning and volatility was on the rise. Those fears mitigated as traders took in polling data, which showed resilience from Clinton. In a Clinton win over Trump, U.S. Trust’s Quinlan expects a rally heading into 2017. “The global economy is being run by the U.S.” Quinlan said, noting improving employment and income data. “With this big event behind us we are positioned for higher equity prices by the end of the year, and I think dramatically so,” he added.
Others who foresaw Trump’s outperformance in the general election, for instance DoubleLine Capital’s Jeffrey Gundlach, are not yet backing down from their calls. “I think we can all agree that Donald J. Trump has massively outperformed expectations in the past,” said Gundlach on Tuesday evening. Such an outcome would “cause a downgrade of global growth expectations or maybe even a global growth scare,” Gundlach told FORBES earlier in the year.
3:30 p.m. ET: The CBOE Volatility Index, or VIX, rallied in late trading as investors sought a way to buy protection against market risk heading into the close of trading. The VIX has tumbled over the past few trading sessions, in concert with rising equity markets, as investors began to price in a win by Democratic nominee Hillary Clinton. The VIX rallied from down as much as 6% on Tuesday to slightly in the green by 3:15 p.m. ET, but equity markets held onto their gains. Confidence was bolstered when a Las Vegas judge denied a request by the Trump campaign to impound ballots from some polling stations in Clark County, Nevada.
2:28 p.m. ET:
Markets began to sell-off in mid-afternoon trading after Republican nominee Donald Trump sued the Clark County Registrar of Voters, seeking to impound and segregate ballots from early voting on Friday, Nov. 4. Trump alleged in a suit the registrar “unlawfully” extended voting hours by allowing voters to enter lines after an 8 p.m. deadline. The lawsuit, targeting areas of heavy reported early voting, sent the S&P 500 Index off intra-day highs to 2,139, up 0.39%, and caused fear gauges like the CBOE Volatility Index to pare early losses.
It’s Election Day in the United States and voters are taking to polling stations across the country to decide the balance of power in the White House, in addition to races in the Senate and House of Representatives. In global markets, a bumper Monday rally on strength by Democratic nominee Hillary Clinton took of the thunder out of early Election Day trading.
U.S. equity markets opened up moderately in early trading Tuesday after gaining over 2% on Monday as traders began to price in a Clinton victory. (Read FORBES’ Election Day Live Blog)
The S&P 500 Index was up 0.38% by noontime, while the Dow Jones Industrial Average gained 0.44%, or 81-points, at 18,342. In Europe and Asia most large marked indices closed trading higher. Trading prices across assets indicated a bullish bias from traders.
Oil gained slightly in the morning trading session, rising 0.16% at 45.05 a barrel for West Texas Intermediate and gold fell slightly to 1,277 a troy ounce. Meanwhile, the yield on the 10-year U.S. Treasury rose for a second day and similar duration government bonds in Brazil and Mexico fell. Safe haven currencies like the Swiss franc fell. The CBOE Volatility Index, meanwhile, fell 3% adding to Monday losses as traders took off their hedges.
Volatility in early trading was mostly confined to Tuesday stock blowups from Valeant Pharmaceuticals, Hertz and OneMain Financial, which all used Election Day to dump significantly negative earnings and guidance on their investors.
Embattled Valeant slashed its 2016 financial outlook, provided a cagey picture into its 2017 earnings expectations, and recorded a billion dollar writedown related to a recent acquisition. The stock, a top holding of hedge funds Pershing Square and ValueAct Capital, plunged 18% to new multi-year lows below $16 a share. It has fallen nearly 85% year-to-date, battered by an accounting and price gouging scandal that’s spawned numerous criminal and regulatory probes.
The picture was even worse for OneMain and Hertz, which both saw their shares fall more than 30% in early trading. OneMain, a consumer finance company, reported third quarter earnings that shows a significant deterioration in the credit of its customers as charge-off ratios on loans surged. The stock plunged 38% in early trading, putting year-to-date declines at 60%.
Car rental giant Hertz, meanwhile, plunged over 30% after the company significantly missed third quarter earnings estimates. The company reported third quarter earnings of 49-cents, down from the $2.60 it earned a year ago, and well below the $1.58 a share analysts were expecting. Hertz also slashed its full-year earnings guidance, causing investors to fret its $15 billion debt load.
Stock blowups aside, as midday trading began markets were trending higher and signs of investor fear mitigated. The Mexican Peso and the CBOE Volatility Index have been the two most volatile gauges of investors’ election expectations in what’s seen as a binary choice. As of now, a Trump presidency is seen as causing a volatility spike and a tumble in the peso given his anti-free trade views and temperament. So far, markets are siding with Clinton. By 12:30 pm, the Mexican Peso was trading 0.84% higher versus the dollar, while the VIX was down 4.65%.
Expect trading volatility to increase later in the afternoon or overnight as election data comes in.
Investment strategists at RBC Capital Markets have laid out a baseline for a Clinton and a Trump victory, arguing that the S&P 500 should rally 3%-to–4% upon a Clinton win and decline 10%-to–12% on a Trump victory. At current levels, RBC feels the VIX should decline to 13–14 upon a Clinton victory and rise to 20–25 if Trump prevails, while emerging markets such as Mexico and China should rally under a Clinton presidency and sell off sharply if Trump wins.