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Category: Stockmarket / Currency / Futures / Markets / US Elections

US stocks drop ahead of Trump-Clinton debate

Tuesday, 27 Sep 2016 06:37:40 | Sue Lannin

It is not just US voters watching the presidential debate, so are financial traders. (Reuters: Brian Snyder/Mike Segar )

US stocks slumped ahead of the presidential debate in the US between Hillary Clinton and Donald Trump.

Markets at 8:30am (AEST):

  • ASX SPI 200 futures -0.8pc to 5,373
  • AUD: 76.4 US cents, 58.9 British pence, 76.65 Japanese yen, 67.85 euro cents, $NZ1.05
  • US: S&P 500 -0.9pc to 2,146, Dow Jones -0.9pc to 18,095, Nasdaq -0.9pc to 5,257
  • Europe: Euro Stoxx -1.9pc to 2,976, FTSE -1.3pc to 6,818, DAX -2.2pc to 10,394
  • Commodities: Gold +0.1pc to $US1,338/ounce, Brent crude oil +2.3pc to $US46.95/barrel, iron ore -0.2pc to $US56.40/tonne

The Dow Jones Industrial Average fell nearly 1 per cent ahead of the public debate, which is expected to draw up to 100 million viewers in the US.

NAB's Ray Attrill said the initial reaction to the debate will best be captured on markets by the Mexican peso, which has become the "whipping boy" of a Trump victory.

"Snap judgement in markets on whether The Donald is regarded as having scored points over Hillary, or vice versa, is likely to be show up first in the Mexican Peso," he wrote in a note.

"This is the FX market's current weapon of choice, such is the level of concern that were Trump to win, he would unleash a trade war with Mexico (Mexico and China having to date borne the brunt of Trump's broadsides against trade relationships he regards as causing the greatest hurt to American jobs).

"The peso has already lost 11 per cent against the US dollar since mid-August, but has the potential to lose much more if Trump is seen to be further narrowing the poll gap with Clinton – or indeed move ahead of her."

Healthcare stocks fell, led by pharmaceutical giant Pfizer.

German lender Deutsche Bank fell more than 7 per cent to a record low after speculation it will need to raise capital to pay fines associated with the subprime mortgages that triggered the global financial crisis.

The German Government also cast heavy doubt on whether state funds would be made available to assist the banking giant if requested.

That weighed on other financial stocks in Europe and the US.

The DAX in Germany fell 2.2 per cent, with France's CAC 40 down a similar amount.

In London, the FTSE 100 recorded its worst one-day percentage fall since June, when Britain voted to leave the European Union.

Turkey's credit rating was cut to junk status by credit ratings agency Moody's, triggering falls of nearly 4 per cent for its key share market indices.

In Australian futures trade, the ASX SPI 200 was down 0.8 per cent, indicating a weak start for the local market.

On commodity markets, oil continued its rebound of the past couple of days and iron ore held firm.

The Australian dollar edged up to 76.4 US cents.

AustraliaPlus


 

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