Markets Waiting for Final Vote Tally, Clinton Concession Speech

U.S. equity futures remain under pressure early Wednesday and investors continue to flock into safe haven assets as investors await the outcome of the U.S. presidential election. At 0553 GMT, according to Foxbusiness.com, Republican candidate Donald Trump is 16 electoral votes away from winning the U.S. presidency. The current electoral vote counts stood at 254 for Trump and 209 for Democratic nominee Hillary Clinton. A candidate requires 270 electoral votes to win the White House.

Clinton may win the popular vote, but she lost the key states which carry the most electoral votes. In the U.S., winning the popular vote is not as important as winning the states with the most electoral votes. This type of system assures that the smaller populated states have a voice in the election process and are not dominated by the larger, more popular states.

Traders are selling risky assets because a Trump win will mean it will not be business as usual. He is the candidate for trade. He appealed the most to the blue collar worker and the non-college educated voter.

Sellers hit the U.S. stock markets hard, dropping the Dow futures contract as much as 861 points before the market bounced back to down 699, or 3.82%. Traders are bracing for even more selling on Wednesday when the cash market opens, however, the exchanges may have circuit-breakers in place to prevent the stock market from crashing. The exchanges are trying to maintain an orderly trade.

As investors exited the stock markets, they sought shelter in safe haven assets like gold and Treasury debt. The precious metal was up as much as 4.68%, while the yield on the benchmark 10-year U.S. Treasury Bond, declined 0.137 percentage points to 1.73%.

The Mexican Peso plunged 11.54%, its lowest-ever level against the U.S. Dollar. The Japanese Yen rose sharply against the U.S. Dollar with the USD/JPY dropping to 101.578, down 3.572 or -3.40%.

The early price action is reminiscent of the frantic, volatile swings seen back in June following the Brexit referendum in the U.K. when voters there decided to end their country’s 40-year membership in the European Union. This means we are likely to continue to see a volatile reaction for several days until investors get used to the idea of a new president with new policies to enact.

The voters have spoken and the markets have responded. Now all we are waiting for is the final tally of votes or a concession speech from Hillary Clinton.