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A shock to Trump them all
After months of bitter and divisive campaigning our American cousins will go to the polls to elect their next president on 8 November.
The race has been given new life by the intervention of FBI director James Comey, suggesting that Donald Trump still has a chance of winning.
The polls were already tightening before Comey made his controversial move which arguably left Hillary Clinton with a red face.
He notified Congress about a batch of messages which could potentially be pertinent to an investigation into Clinton’s use of a private e-mail server while she was secretary of state.
I’ve got to admit when my colleague Daniel Coatsworth wrote his excellent feature on the US elections for last week’s issue I was sceptical it was even worth addressing the implications of a Trump win, so unlikely did it seem.
Turns out he was right not to write Trump off and the chances of another political earthquake to follow June’s EU referendum result are now significantly heightened.
BREXIT Times 10
Trump says, in typically low key fashion, a win for him could be ‘Brexit times 10’ (previously he was content with a factor of five). It is a shock which like the Brexit vote is not being priced in to global stock markets.
One of the big trading platform providers had a binary product leaning 78% towards a ‘Remain’ vote the day before the Brexit result. A similar instrument on the US election currently shows a very similar weighting to the perceived status quo outcome, with 76% on a Clinton victory.
A key strand of last week’s feature on the US election was to discuss a likely sell-off in response to Trump’s election followed by a rapid recovery.
The best advice for long-term investors is probably to do nothing. After all, anyone who reacted too hastily to the panicked sell off in late June will have crystallised heavy losses – and they subsequently missed out on a big rally in the intervening months.