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Global Investors Concerned About Possible Donald Trump Victory

US Election 2016Democrat Presidential nominee Hillary Clinton looked to be a clear winner at the end of October as she had a strong lead in the polls over her Republican rival Donald Trump.

However Donald Trump has managed to close that gap over the last week as the FBI confirmed it was launching an investigation into emails that a close aide of Hillary Clinton had sent. The fact that Trump is closing the gap has caused global investors to be concerned as oil prices, the dollar and global stocks all dropped on November 2. The presidential vote will take place on November 9 and a winner will be announced but global investors are no longer certain that Hillary Clinton will be the next president.


The DAX in Germany dropped by 0.7 percent while the FTSE in Britain dropped by 0.4 percent. The 300 leading share index in Europe which hit a four month low earlier when it reached 1,313 points also fell by 0.4 percent.

Analysts from Barclays suggest that if Trump continues to rise in the polls and pulls level with Hillary, the S&P 500 could drop by 4 to 5 percent. Analysts believe that the S&P 500 could drop by as much as 10 to 11 percent if Trump gets elected as the next US President.

In a statement, Koichi Yoshikawa, executive director of financial markets at Standard Chartered Bank said

If you had a long dollar position on the view that the dollar would gain because Clinton would win, you would surely close that position because her victory is less certain.

A Reuters poll shows that Clinton still holds a 5 point lead over Donald Trump but some of the other polls show that Trump has already pulled ahead and leads her by 1-2 percent. Asian stocks were also impacted by the US presidential race and hit a seven week low on November 2.

However U.S Stock futures have managed to recover from previous losses and showed a decline of just 0.1 percent when the markets were open. Though the fall is just 0.1 percent, it is still a four month low for Wall Street. Safe haven assets such as the Swiss franc and gold were not affected by the political climate and continued to do well. The Swiss franc experienced a four month high, going up to 1.0750 francs per euro while gold prices experienced a four week high, going up to $1,297 per ounce.

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