The Cable

Global Stocks Take a Dive As Trump Surges Ahead of Debate

Investors around the world are nervous about the possibility of a Trump victory Monday night.

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Monday night’s presidential debate isn’t all about politics. It’s also about money, and the potential to lose a lot of it.

Ahead of the first in-person clash between Republican presidential nominee Donald Trump and his Democratic rival Hillary Clinton, stocks around the world traded lower. Surveys show Wall Street CEOs prefer Clinton over Trump because of the uncertainty his presidential bid would bring; not one Fortune 100 CEO backs the businessman. Futures markets also heavily favor a Clinton victory. But Trump’s recent surge in the polls –they now show it to be a dead heat nationwide– have investors nervous.

“Investors are acting extremely nervous with regards to the debate … and it highlights the fact that the markets are not focusing on the health of the economy, interest rates and geopolitical events,” Robert Pavlik, chief market strategist at Boston Private Wealth, told Reuters Monday.

A rundown of world stock markets show this. In the United States, the Dow Jones Industrial Average and the S&P 500 were both down about one percent in midday trading.

In Asia, where many nations risk seeing the Trans Pacific Partnership with the United States disappear after the election, the Shanghai Composite Index in China was down 1.8 percent (China isn’t a signatory to the pact). Japan’s Nikkei stock index closed 1.3 percent lower.

European indexes showed more of the same. The DAX in Germany was down 2.2 percent. The FTSE in London shed 1.6 percent for its worst one-day loss since July 6.

More broadly, the MSCI world equity index, which tracks stocks in 45 countries, was down 1 percent.

And tomorrow should be a telling day on world markets. If Clinton is deemed the winner, it could be a normal Tuesday. If Trump is victorious, stocks could be in for a bumpy ride.

“I still feel the markets have not priced in a potential Trump victory. I think most people in the market think she’s going to win, and if you look at the electoral college map, you can still make that case even though it’s tightened. I think the market would have to focus on what it means if he were to win,” Greg Valliere, chief global strategist at Horizon Investments, told CNBC Monday. “First and foremost, the market has to care about uncertainty. He changes his positions with regularity.”

Photo credit: JEWEL SAMAD/Getty Images

David Francis was a senior reporter for Foreign Policy, where he covered international finance. @davidcfrancis

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