WALL STREET SAYS BOTH LOST

Stock market indexes for each candidate fell Thursday, no matter the nominees’ performances in final debate

Investors are clear about who they think walked away victorious from Wednesday’s presidential debate: No one.

The stock market is telling the score. Equal-weighted stock market indexes containing stocks likely to benefit from a Hillary Clinton victory or a Donald Trump victory both dropped Thursday following the third debate, based on a USA TODAY analysis of data from S&P Global Market Intelligence based on portfolios constructed by investment firm Motif Investing.

Investors’ negativity reflects the idea politics have turned into a risk, no matter who wins the presidency.

“In many investors’ minds, the perceived risks associated with a Trump victory in the presidential race have been replaced with concerns about the implications of a Democratic sweep of leadership in Congress (for both the Senate and House to flip),” according to a note to clients co-authored by Lori Calvasina at Credit Suisse.

The Clinton victory index, filled with clean technology, cyber security and Obamacare stocks, declined 0.6% Thursday. Meanwhile, the Trump index, populated with stocks in defense, firearms and real estate, fell 0.4%. Both indexes were down more than the Standard & Poor’s 500, which declined 0.07% Thursday.

The Clinton and Trump indexes reveal, too, how investors have increasingly expected that Clinton will win the Oval Office.

The Trump portfolio is up 5.7% year to date, topping the 4% decline by the Clinton portfolio, primarily due to strength earlier in the year when a Trump victory looked more likely.

But since the first debate Sept. 26, the tables have turned. The Trump portfolio has declined by 2.5%, while the Clinton portfolio is off 1.7%.

This is far from a scientific method, but looking at stocks likely to benefit from a Clinton or Trump administration gives a

Worries about a Trump victory “have been replaced with concerns about ... a Democratic sweep.” Lori Calvasina of Credit Suisse, in a note to clients

glimpse into the market’s changing expectation as the contentious campaign continues.

The Clinton portfolio comprises 68 holdings in portfolios called Cleantech Everywhere, Cyber Security, Obamacare, Smart Grid and Battery Charged.

The Trump portfolio contains 94 stocks in portfolios called Natural Gas Glut, Modern Warfare, Gun, Guards and Gates, Office Space and Renter Nation.

Some stocks could benefit despite the jitters of investors, Calvasina says. Shares of companies with high international, industrial or consumer discretionary exposure stand to benefit in the near term and have been trading with close correlation with poll results, Calvasina says.

But the fear now is data showing stock returns tend to be slightly lower when Democrats control Congress in addition to the White House, Calvasina says. In the two years following an election, historically, stocks have gained 29.3% when the Democrats control Congress and the White House.

Average two-year gains were 34.3% when Democrats had the White House and Republicans controlled Congress.

“With Clinton pulling away in the national polls, and a Trump victory appearing far less likely, we think short-term risk for the broader U.S. equity market has been reduced.

“But we do not think it is has been entirely eliminated,” Calvasina says.