The Clinton-Trump Debate Will Influence Wall Street
On Monday, the first U.S. presidential debate between Democratic candidate Hillary Clinton and Republican candidate Donald Trump will act as a short-term catalyst in the direction Wall Street will take.
So far, Wall Street has favored a Hillary Clinton victory, based on the fact that she is a well-known personality with a strong track record and recognized government policies.
On the other hand, there is a certain amount of uncertainty about the Republican Donald Trump, with his volatile personality and constantly shifting views on key issues, although there are some on Wall Street already preparing for his tax proposals and likely economic plan.
In keeping with the predictions for the November election, Clinton has a slight lead going into the debate which takes place on Monday, Sept. 26, but in reality there is a chance that Trump could win.
A recent NBC/Wall Street Journal poll has Clinton ahead by six points, with 43 percent of the vote to Trump’s 37 percent amongst potential voters.
Since 1992, the S&P 500’s index has gained an average of 0.85 percent the day after the first debate between the two presidential candidates, according to the financial firm Strategas, as reported by News, the CNBC financial news site.
The S&P 500 is short for the Standard & Poor's 500, which includes 500 companies represented on the New York Stock Exchange. The importance of this index, together with the Dow Jones index, is the role it plays in the world's most important financial market: Wall Street.
Company data were eliminated in 2008, since the market was embroiled in a congressional debate about the "TARP" program to help banks during the peak of the worst financial crisis in modern times.*
"Stocks usually rally if the incumbent party wins. If Hillary puts Trump away in the debate, you’ll see a broad rally in the S&P 500; and if Trump wins, people will see a risk-off scenario," said Daniel Clifton, head of policy research at Strategas.
However, Trump has an advantage with his tax proposals, including a cut in the corporate tax rate. "Trump could be very good for the market because his tax reform and regulatory reform are good for growth," Clifton said.
In the last seven elections, the first debate has led to polling margins of at least two percentage points for the winner, and that would be key in this election where Clinton’s lead is not that wide in some polls.
Political strategists point out that Clinton has to appear physically strong in the debate and overcome concerns about her health after a recent bout of pneumonia and other health issues in the past.
Trump has to appear presidential; a steady hand who can be trusted to lead the nation.
"There are 100 million people watching the debate between two of the most unpopular candidates for president in modern American history," said Clifton.
*Editor’s note: TARP is the acronym for the “Troubled Asset Relief Program” of the U.S. government to buy toxic assets and equity from financial institutions to strengthen the U.S. financial sector. It was signed into law by former President George W. Bush in October 2008.
So far, Wall Street has favored a Hillary Clinton victory, based on the fact that she is a well-known personality with a strong track record and recognized government policies.
On the other hand, there is a certain amount of uncertainty about the Republican Donald Trump, with his volatile personality and constantly shifting views on key issues, although there are some on Wall Street already preparing for his tax proposals and likely economic plan.
In keeping with the predictions for the November election, Clinton has a slight lead going into the debate which takes place on Monday, Sept. 26, but in reality there is a chance that Trump could win.
A recent NBC/Wall Street Journal poll has Clinton ahead by six points, with 43 percent of the vote to Trump’s 37 percent amongst potential voters.
Since 1992, the S&P 500’s index has gained an average of 0.85 percent the day after the first debate between the two presidential candidates, according to the financial firm Strategas, as reported by News, the CNBC financial news site.
The S&P 500 is short for the Standard & Poor's 500, which includes 500 companies represented on the New York Stock Exchange. The importance of this index, together with the Dow Jones index, is the role it plays in the world's most important financial market: Wall Street.
Company data were eliminated in 2008, since the market was embroiled in a congressional debate about the "TARP" program to help banks during the peak of the worst financial crisis in modern times.*
"Stocks usually rally if the incumbent party wins. If Hillary puts Trump away in the debate, you’ll see a broad rally in the S&P 500; and if Trump wins, people will see a risk-off scenario," said Daniel Clifton, head of policy research at Strategas.
However, Trump has an advantage with his tax proposals, including a cut in the corporate tax rate. "Trump could be very good for the market because his tax reform and regulatory reform are good for growth," Clifton said.
In the last seven elections, the first debate has led to polling margins of at least two percentage points for the winner, and that would be key in this election where Clinton’s lead is not that wide in some polls.
Political strategists point out that Clinton has to appear physically strong in the debate and overcome concerns about her health after a recent bout of pneumonia and other health issues in the past.
Trump has to appear presidential; a steady hand who can be trusted to lead the nation.
"There are 100 million people watching the debate between two of the most unpopular candidates for president in modern American history," said Clifton.
*Editor’s note: TARP is the acronym for the “Troubled Asset Relief Program” of the U.S. government to buy toxic assets and equity from financial institutions to strengthen the U.S. financial sector. It was signed into law by former President George W. Bush in October 2008.
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