Daily Management Review

Hillary Clinton the Winner of First Debate, Declare the Markets


Hillary Clinton the Winner of First Debate, Declare the Markets
Based on analysts' take on the market reaction,  Hilary Clinton appears to have edged out her Republican opponent Donald Trump in the first presidential debate.
"Early indications suggest Hillary won the debate; at least didn't lose. Futures are higher and the peso is rallying," said Jack Ablin, chief investment officer at BMO Private Bank. 
As the debate kicked off, U.S. stock index futures erased losses to trade positive. With Dow futures briefly adding more than 100 points, Futures were near session highs as the debate ended.
The U.S. dollar was stronger against the yen and last traded about 1.8 percent weaker against the Mexican peso. The euro-dollar held steady near $1.125.
As Trump appeared to gain momentum in election polls, the Mexican peso has hit all-time lows against the U.S. dollar in the last few days.
With pressure on the financial sector from a plunge in shares of Deutsche Bank to record lows and weighed by concerns ahead of the evening debate, the Dow Jones industrial average closed more than 150 points lower Monday.
"I think Hillary Clinton did pretty well. I think she was better prepared than Trump. Whether the debate will mean anything (remains) to be seen," said Bruce Bittles, chief investment strategist at Baird.
However, not discussed at this debate were issues such as drug pricing and breaking up the banks – some of the key market issues. The need to strengthen cybersecurity was agreed upon by both the candidates. While Trump said hacking and cyberwarfare was a "huge problem,"  Clinton focused more on combating terrorism in cyberspace.
Clinton's "direct references to supporting Arab allies against ISIS was also a strong statement that reiterated the current administration's approach, although she did not offer much that was new," said Paul Christopher, head global market strategist at Wells Fargo Investment Institute.
"Mr. Trump agreed that we could be better at cybersecurity, but his answers were diffuse and unfocused, and handicapped by his well-known favorable comments about Russian President [Vladimir] Putin. Mr. Trump could have said more about opening a broader cyber front against ISIS," Christopher said.
Analysts were quick to point out that there are still two more presidential debates to come ahead of the November election and wanted to make people  sure that the immediate Monday night market reaction to the debate could reverse.
"If markets think she did well, then the polls need to reflect that. In the financial industry, the (market participants), they can have an assessment she won. That doesn't mean the average voter has the same view," said Andres Jaime, global FX and rates strategist at Barclays.
"If a poll in the next few days shows the race is as tight as it (was heading into the debate), then markets will probably sell off," he said. He said clarity on the latest polls should come by the end of the week.

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