US elections are held on the first Tuesday in November, but how should traders react on the first Wednesday? In most scenarios, going against the initial knee-jerk response that would have been incorporated in overnight trading would look attractive.
Judging by recent correlations, a Trump win would be an obvious negative for the value of the Mexican peso (Chart).
US equities haven’t had quite as strong a fit, but since August, although one can’t prove cause and effect, the S&P 500 generally rallied on Clinton poll gains, and lost ground when her margin faded. More granularly, Clinton is seen as a plus for alternative energy stocks and less of an issue for multinationals than Trump, but a negative for coal producers, pipelines, some biotechs and others that might face a tougher regulatory environment.