Clinton Trump Round-One

 

Volatility within the capital markets is poised to pick up especially with a Donald Trump victory for the White House.  Equity futures prices were higher initially as Clinton appeared to be in control during there first debate. Monday’s debate at Hofstra University is round-one in a fight that will likely go to the wire.  Historically the United States has been split down the middle in terms of ideology.   The 2-4 point spread between the candidates will likely flip flop until the November elections, driving market volatility higher.

The two sides appear to be driven more by dislikes than likes for the candidates. Clinton is a staple in Washington, and those who oppose her have seen what she brings to the table.  Trump is more of an unknown, but his policies appear to be economical supply side driven, catering to the wealthy, while is social policies rub most minorities the wrong way.  His base feel that he says all the things that people think, or at least what they think.  This has allowed Trump to use populism as a weapon.

Going into the debate pundits were wondering whether Candidate Trump would change his tune on Trade, taxes, and how he views the responsibilities of other countries.  On the topic of security Clinton said that Trump “publicly invited” Russia to hack us, which is “unacceptable”.  On the topic of whether Trump would reveal his tax returns, he claimed that he would release his returns when his audit was complete or Secretary Clinton released her hidden emails. Clinton also said that, Trump would cut taxes for the rich in “trumped up” trickle-down economics, which appears to be a new term she has coined.

Trump initially discussed how horrible the situation is in the United States as jobs were leaving to go to Mexico and China but this needed to be stopped. Trump again accused the Fed of being political to help Obama. He also bragged about “not paying taxes”. Calling out Janet Yellen as completely a political figure and the dangers of having a Federal Reserve Chair that was politically motivated.  Clinton appeared to be more upbeat, discussing the strength of the economy and reassuring countries around the world that the United States will uphold its treaties.

Who won the debate, well that is left up to interpretation?  Clinton was presidential, while Trump continued to drive his populist agenda.  Trump said that Clinton does not have the stamina and ability negotiate as the President.  He said that Clinton has experience but it is “bad experience”. Clinton countered with her experience as Secretary of State, and discussed that Trump believe that women do not desire “equal pay”. Stocks traders generally appreciate certainty, which means that a Trump victory will drive volatility, while Clinton will likely generate complacency.