Wall St rallies after worst run in 36 years
Nine-day slump ends as Clinton is cleared by FBI
WALL Street brought its worst run for 36 years to an end last night as investors bet Hillary Clinton will win the race to the White House.
The flagship S&P 500 index of leading American companies rose 2pc in New York in early trading after the FBI dramatically cleared the Democratic presidential candidate of any wrongdoing relating to her emails.
The rally followed nine straight days of declines on the S&P – its longest losing streak since 1980 – amid fears that Donald Trump was set to become the next President of the United States.
But the decision by the FBI not to charge Clinton over emails sent from a private server while she was Secretary of State under Barack Obama appeared to put her on course for victory in the eyes of investors.
Jane Foley, a currency strategist at Rabobank, said the FBI’s announcement ‘lifts a cloud of uncertainty over her campaign and likely strengthens her position’.
Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, said: ‘We’ve been down nine straight days as concerns over a potential Trump victory put a lot of caution in the market. Some of that is being relieved. There will be more volatility for the rest of the week following the election.’
Analysts at US banking giant Citi said the end of the FBI probe ‘helps eliminate the risk that a Clinton victory is plagued by investigative uncertainty’.
With voters across the US going to the polls today, shares and the dollar rallied yesterday and gold fell despite warnings that the race to the White House, pictured, was still too close to call.
The FTSE 100 index was up 113.64 points or 1.7pc to 6806.9 in London while Frankfurt and Paris gained 1.9pc, Milan 2.6pc and Madrid 1.5pc. The dollar made strong gains against currencies around the world – pushing sterling down as much as 1pc against the greenback to $1.238. Gold, which traditionally does well in times of crisis, fell nearly 2pc towards $1,280 an ounce.
Neil Wilson, an analyst at City trading firm ETX Capital, said recent movements on the financial markets reveal what investors think about the two candidates. ‘It’s becoming a fairly binary choice – Clinton positive for dollar and stocks, Trump good for havens like gold.’ But analysts warned of a Brexit-style upset following the most bitter and divisive presidential campaign in living memory.
‘We still can’t exclude the possibility of Donald Trump being elected,’ said Stephen Gallagher at Societe Generale.
Luke Hickmore, a fund manager at Aberdeen Asset Management, said investors were still scarred having been taken by surprise by the Brexit vote in the UK in June.
One currency the dollar failed to rise against was the Mexican peso, which has become a barometer for the presidential election because of Trump’s threat to build a wall along the Mexican border if he wins. The peso rose more than 2pc against the dollar yesterday as the chances of Trump becoming President and building his wall receded.