US Election

The eagerly anticipated US Presidential election has finally arrived and the latest opinion polls suggest that the result hangs in the balance. Hillary Clinton appears to have a very slender lead, but the momentum is with Donald Trump and he has narrowed the gap significantly over the last two weeks. The undecided voters will settle the contest and it will come down to one or two key “swing” states such as Florida or Ohio. It is difficult to know exactly how investors will react in the morning, but a Clinton victory is largely priced into the current level of both the US bond and equity markets. A Trump upset would undermine confidence and reintroduce a period of short-term anxiety. Irrespective of the overnight outcome, the US Federal Reserve remains firmly on track to raise interest rates next month and the recovery in the economy is likely to continue unabated. The US is a deeply divided political nation and it will take time to heal the self-inflicted wounds suffered along the grossly elongated campaign trail. The eventual winner will need to rebuild bridges across the country and on both sides of the political aisle.