investors generally do not like uncertainty. now, the biggest unknown hanging over the markets <u+2014> the outcome of the united states presidential election <u+2014> is about to be known. nervousness over the election has been reflected in wall street<u+2019>s <u+201c>fear gauge,<u+201d> the index known as the vix, which in recent weeks has been at its highest levels since the market turmoil in late june after britain<u+2019>s vote to leave the european union. when the presidential election is called, there is no guarantee how markets will react. but stocks, currencies and commodities have already provided clues as they fluctuated after major news events over the course of the campaigns. the first reaction will come in asian trading early wednesday, particularly in the value of the united states dollar against other currencies. a victory by hillary clinton has been largely priced in by investors. that was evident by what followed the decision on oct. 28 by the f.b.i. director , james b. comey, to update congress on the status of the investigation into mrs. clinton<u+2019>s emails. stocks fell, and the benchmark standard & poor<u+2019>s 500-stock index closed lower for nine consecutive sessions for the first time since 1980. on monday, after mr. comey<u+2019>s announcement that recently discovered emails warranted no further actions, the s.&p. rose 2.2 percent. confirmation of what the market has expected is likely to produce a relief rally on wednesday and a rise in the value of the dollar. investors who have been sitting on cash in recent weeks may decide to pile into the market. yet shares of drug companies and financial companies <u+2014> potential targets for regulation <u+2014> may not fare as well on news of a win by mrs. clinton. a victory by donald j. trump would come as more of a shock to investors. barclays analysts have said they would expect a decline of as much as 13 percent in the s.&p. 500. citigroup analysts say they would expect a drop of 3 to 5 percent. investors would flee risky assets and seek out the relative safety of treasury securities and the swiss franc. the mexican peso, whose value against the dollar this year has largely inversely tracked mr. trump<u+2019>s electoral prospects, would plummet. yet as andrew ross sorkin recently noted , after the immediate reaction, investors may find opportunities in a trump victory, in shares of energy and health care companies among others.
what the election could mean for the markets
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