Just came in to our trade floor. Not proprietary. Enjoy Wednesday!
Sector Analysis (Source: Bloomberg)
Equities:
Clinton wins: S&P 500 Index could gain as much as 3 percent and big losers would be finance, drug companies and banks.
Trump Wins: Trump victory could trigger a massive sell off and many would consider that a classic “black swan event, and much more severe” than Brexit and Barclays predicted the S&P 500 would nosedive by between 11 percent and 13 percent if Trump wins.
Currencies:
Clinton Wins: The U.S. dollar would gain versus other developed-market currencies with the Democrats heading toward the White House as traders focus attention on the likelihood that the Federal Reserve will raise rates in December, according to Capital Economics, a London-based research firm. Down the road, Bank of America sees the greenback gaining under Clinton only if the Democrats take Congress.
Trump Wins: The foreign-exchange markets this week are suggesting the dollar
tumbling against almost all major currencies and the Mexican peso falling to a three-week low.
Commodities:
Clinton Wins: Her environmental policies, especially her promise to combat climate change, will put pressure on coal and oil. The natural gas market could get a boost from her pledge to wean power plants off coal by using gas as “a bridge” to more reliance on renewables.
Trump Wins: Natural gas prices likely would suffer as coal benefits under Trump. He has promised to roll back environmental rules that squeeze coal out of the U.S. power market and promoted “clean coal” during one of the debates. Bloomberg Intelligence in September estimated that a victory by the Republican would shave 11 percent off natural gas demand in 2030 from last year’s levels, boosting coal use. Oil prices could get a lift. Gold, platinum and silver would the “biggest winners” if Trump wins, said Yang, the CMC Markets analyst
Fixed Income:
Clinton Wins: A victory by the Democrat would initially drive up yields as investors sell off Treasuries in favor of riskier assets, Bank of America Corp. analysts said in a report. Ripple effects would raise borrowing costs for individuals and corporations worldwide because U.S. sovereigns are the global debt benchmark
Trump Wins: In the two weeks after the U.K. gobsmacked pollsters and voted to leave the EU on June 23, the U.S. benchmark 10-year yield fell 39 basis points and didn’t return to pre-Brexit levels until September. Something akin to that would happen if Trump defies conventional wisdom, analysts said. Credit Agricole SA predicts a “massive disjoint” that would send 10-year yields down at least 10 basis points if he prevails