U.S. stock markets were looking to open lower on Wednesday following Donald Trump’s win in the presidential election.
US and European stock futures and benchmarks in Asia are sliding, and the Mexican peso has crashed. Safe havens including US Treasurys are rallying, meanwhile.
The way investors see it, Trump and his economic positions are less predictable than Hillary Clinton’s and do not always follow Republican party orthodoxy. And so he is perceived as more of a political risk.
That, as well as the fact that major forecasters thought a Clinton win was more likely ahead of the results, have created a surprise for investors.
While a Clinton victory would’ve likely boosted stocks a bit, John Higgins, chief markets economist at Capital Economics argued earlier that a Trump win could pull things in the “opposite direction.”
And as things stand in the early hours Wednesday, that’s more or less what we’ve been seeing.
The Mexican peso is down by about 12.9% at 20.6842 per dollar around 11:50 p.m. ET. By comparison, before election data starting rolling out, the currency closed the day up by about 1.3% against the dollar.
This currency has been the most watched of the election. A weaker peso has tracked higher odds of Donald Trump winning the election, given his past comments on toughening trade and immigration with Mexico.
US stock futures are plunging as well. As of 11:39 p.m. ET on Tuesday, Dow futures were down by 753 points — about 4.13%. If this plunge holds, it sets the market up for an ugly start to trading on Wednesday.
Gold is up by 3.8% at $49.50 an ounce as of 11:42 p.m. ET at $1,324 an ounce. By contrast, in early evening trade, gold fell by $6 per ounce; and it is $30 per ounce above its high during trading on Tuesday.
US Treasurys are also soared, with the 10-year yield falling more than 11 basis points to 1.736%.