Oct
06

Wall Street Might Have a Blind Spot When It Comes to Trump

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  • Markets inefficient at pricing in unexpected political events
  • High voter distrust risks surprise U.S. election outcome

Minutes into last week’s presidential debate, investors decided that Donald Trump, a candidate many of them fear, was being outshone by Hillary Clinton. This, they figured, would help stem his momentum, and so they frantically bid up the value of the Mexican peso, a currency that has become an election barometer. The next day, the S&P 500 Index followed suit, jumping 0.6 percent.

But what if the debate doesn’t really matter? What if it turns out, as many analysts suggest, that support for Trump’s candidacy can’t be measured by developments in traditional election events? Failure to grasp that, they warn, could lead markets into the kind of misstep and turmoil that the U.K.’s vote to leave the European Union did…

Wall Street Might Have a Blind Spot When It Comes to Trump

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