Since in Victoria, Australia, it is the week that stop the nation (horse racing Melbourne Cup)…let’s talk about dark horse scenarios for the US election
The market favorite scenario we know is a Clinton win and current/similar situation in Congress. Mildly positive, but substantially already in the numbers.
The other classic scenario is a Trump win and current/similar situation in Congress. Negative for the market, but substantially known and mitigated by the fact that at the end Trump is a Republican and will have to follow the party. temporary market loss of 5% to 10% – probably mitigated by the fact could decide not to raise interest rates
The dark horse scenarios which the market is not prepared to is
Clinton sweeps to election and the entire Congress goes Democrats. Democrats had to do many concession to Sanders ( so they went more left in their policy) and the market will sell off brutally.
Clinton or Trump win – but the win is challenged in court by the other and the US government goes practically into paralysis (or a variant of this…Clinton wins and then the FBI really needs to impeach her due to the email contents.
No wonder that institutions are increasing cash!
investorpolitico 