Since he's a businessman, some may believe that Donald Trump's better for the state of the economy than his opponent Hillary Clinton. But in reality, the Democratic presidential nominee may have a more positive impact on the markets. In a strange twist, NPR reported, the stock markets appear to have been impacted by the presidential election. And with Clinton polling ahead, according to Reuters, the dollar's value has increased. Though correlation doesn't imply causation, it's a trend worth investigating.
The dollar’s value dropped last week after FBI Director James Comey’s announcement that the Bureau was looking into another set of Clinton emails, and the S&P 500 went down nearly 3 percent as well, NPR reported. (The FBI later cleared Clinton, for the second time.) After news came out that Clinton would in fact not be facing criminal charges over her emails, the value of the dollar rose again on Monday, according to Reuters. It gained against the yen, euro, and pound.
But what is it about Clinton that could have strengthened the currency? "Markets want continuity and essentially they want what they have priced in — and both point towards Clinton," Joseph Trevisani, chief market strategist at Worldwide Markets, told Reuters. "That's why markets are reacting to anything that boosts Clinton’s chances by taking back some of the selloff from the past week or so."
There was, however, a time when polls suggested that people favored Trump in dealing with economic matters. In mid-July, for example, voters chose Trump over Clinton, 54 percent to 43 percent, when asked which candidate "would better handle the economy," CNN reported. By the end of July that lead was gone, with Clinton ahead 50 percent to 48 percent.
So what happened? For one, news outlets had picked up on what Mother Jones called Trump's "business failures and bailouts from Dad?" Additionally, no Fortune 100 CEOs were backing Trump, while Clinton had 11 Fortune 100 contributors, the Wall Street Journal reported. And to top it all off, Trump made revisions to his economic plan, which the Washington Post described as having "progressed from preposterous to merely intellectually dishonest." Any number of these factors could have played a role.
It turns out that populations will likely be impacted differently by each candidate. Over the next decade, Trump would be expected to create a trillion dollars in tax-breaks for real estate developers like himself, Scott Tucker, a Chicago-based fiduciary investment advisor, told Forbes. But Trump is likely bad news for companies like General Motors and Apple, which rely on importing and exporting; “Both U.S. and international stock markets would be shocked by a Trump win, and would react badly, at least at first, due to concerns over his planned tariffs on imported goods,” Tucker told Forbes.
On the other hand, a Clinton win could affect U.S. stock markets less, since she is not expected to "rock many boats," Tucker said. And many other economists are with him on that, according to a survey of more than 400 experts by the National Association of Business Economists. In fact, 55 percent chose Clinton as the candidate that would do the best job of managing the economy as president, LaVaughn Henry of NABE said in the report. Trump wasn't even the second choice; Libertarian Gary Johnson was chosen by 15 percent compared to 14 percent who chose Trump.
Of course, nothing is set in stone. We'll have to wait until all the votes come in to see how the markets are impacted by whichever candidate we ultimately elect.