| NEW YORK
NEW YORK Oct 9 The latest scandal in Republican
Donald Trump's White House bid bolsters the campaign of his
rival, Democrat Hillary Clinton, and magnifies an existing bias
that a Clinton win is going to be better for U.S. markets,
strategists said on Sunday.
In a now infamous video released on Friday, Trump, then a
reality TV star, is heard talking on an open microphone about
groping females and trying to seduce a married woman. The video
was taped only months after Trump married his third wife,
Strategists in a recent Reuters equity poll mostly viewed an
election victory on Nov. 8 by Clinton as more positive for
stocks until year end, largely because her positions are well
An early clue of the scandal's impact might be seen in
Sunday's early Mexican peso gains and U.S. stock futures
trading. U.S. stock index futures opened higher, with S&P 500
e-minis up 6 points, or 0.28 percent.
"It's a positive reaction (in stocks), and it's very
consistent with what the market has been discounting, which is
that Clinton will win and that's good news," said Hugh Johnson,
chief investment officer of Hugh Johnson Advisors LLC in Albany,
"It's also saying the House of Representatives will stay in
the hands of the Republicans," he added.
Investors await the second U.S. presidential debate
scheduled for later Sunday. It will be the first time the
candidates face off after the Trump video.
The scandal surrounding Trump's comments has also created a
groundswell of prominent Republicans, both in and out of office,
to call for him to withdraw from the race. Strategists say this
could uproot the election process in a way that creates
nervousness for investors.
"If, in fact, Republicans are going to go ahead and replace
him, the chaos that would result, I think, would be a big
negative for the market because it would lead to uncertainty for
the dollar and our place in the world - though I don't think
that will happen," said Rick Meckler, president of investment
firm LibertyView Capital Management in Jersey City, New Jersey.
Earlier Sunday, the Mexico's peso gained more than
1.8 percent against the dollar in thinly traded market
conditions. Trump has been critical of U.S. trade deals with
Mexico and other countries and has called for the creation of a
But Phil Orlando, chief equity market strategist at
Federated Investors in New York, said what will happen in
markets on Monday will depend largely on how the debate goes
what the substance of it is.
Half of America's likely voters will rely on the
presidential debates to help them make their choice between the
two major U.S. party nominees in the Nov. 8 election, according
to a Reuters/Ipsos poll released prior to the first debate on
Sept. 26. U.S. stocks briefly gained ground following the
perceived win by Clinton in the first debate.
Steven Englander, global head of G10 currency strategy at
CitiFX in New York, said: "The market is looking for post-debate
confirmation that Clinton is in a comfortable lead before adding
significantly to positions.
"Both Trump and Clinton supporters expected that emerging
market currencies and U.S. equities would go down and the VIX
would go up if Trump were to win and vice versa if
Clinton wins," he added.
(Reporting by Caroline Valetkevitch; additional reporting and
editing by Daniel Bases and Alan Crosby)