The first presidential debate Monday may be a near-term catalyst for stocks, if either candidate looks set to break out.
So far, Wall Street has favored an Election Day victory by Democrat Hillary Clinton, based on the fact she is a known entity, with a strong government background and known policies. Republican Donald Trump, on the other hand, has an aura of uncertainty, with a volatile personality and changing views on key issues, though some on Wall Street are warming to his tax proposals and economic plan.
“I still feel the markets have not priced in a potential Trump victory. I think most people in the market think she’s going to win and if you look at the electoral college map, you can still make that case even though it’s tightened. I think the market would have to focus on what it means if he were to win,” said Greg Valliere, chief global strategist at Horizon Investments. “First and foremost, the market has to care about uncertainty. He changes his positions with regularity.”