As a result of the looming US presidential debate the stock exchange market took a dive due to pressure from uncertainties surrounding the US presidential debate.
The Dow Jones industrial average slumped a staggering 166.62 points at 18,094.83, S&P 500 dropped 18.59 points at 2,146.10. Apart from withdrawals and points dropped to a low, the Nasdaq Composite lost 48.26 points at 5,257.49 recording a very high lost on Wall Street.
The 90 minute debate between the two US presidential candidates, Hilary Clinton for the Democratic party and also former First Lady and Successful businessman Donald Trump, candidate for the republican party – is expected to draw in a record-breaking number of viewers. Market watchers depend on the debate to have an idea of the directions voters may take at polls.
As said by Canadian market strategist – Craig Fehr “Today, in part, is at least reflecting some of the nervousness about what could or potentially result from the outcome of this campaign as it shapes the rest of the election,”
“Whenever you’re talking about political uncertainty, that tends to be negative in the short term for equity markets. You’re going to see that reflected in various days from here until November.”
A “knee-jerk” negative reaction is what Ferh described as the market situation if trump won the debate. Pressures the declining stock markets are experiencing should be deemed as temporal since indicators show a growing economy.
“At the end of the day, regardless of the outcome of the election, it’s really going to be economic growth and interest rates that will have the most prominent influence on the market,” said Fehr.
“I expect as we move some of the cloud from this campaign, we’ll see more days where the market will react more to the economic data and less to the headlines from the campaign trail.”
Companies would rather trade lower, refusing to split into two smaller ones, as in the case of Pfizer, one of the biggest drug companies in the world. Experiencing a stock fall of 62 cents, or 1.8 per cent, to US$33.64.
S&P/TSX composite index had fallen 78.47 points at 14,619.46, but gains of the mining and energy sector lessened this fall. The Canadian dollar too went down 0.37 cents, which was at 75.55 cents US.
When looking from commodity wise, the crude oil and natural gas was up $1.45 at $45.93 US per barrel and $3.07 US per mmBTU respectively, in November.
As of December, the gold contract rose $2.40 to $1,344.10 US an ounce, the copper contract stayed the same at $2.20 a pound US.