Stocks fell with the dollar amid heightened anxiety five days before the U.S. presidential election.
Bloomberg reports the S&P 500 Index was set for its longest losing streak since 2008 while the greenback weakened for a fifth straight day. Election polls indicating a narrower lead for Clinton jolted equities from their tightest trading range since 2006, sending the CBOE Volatility Index toward its longest streak of gains on record.
Clinton has seen her odds of a victory falter after the FBI reopened a probe into an unauthorized email server. Still, her chances of winning are at 86% in The New York Times’ forecast and 66% in the FiveThirtyEight polls-only outlook.
“Politics is clearly asserting itself as the biggest driver in global markets,” says Alan Ruskin, global co-head of foreign-exchange research in New York at Deutsche Bank AG. “It’s extraordinary how much the narrative has shifted.”
The 2016 election has confounded pundits and upended precedent, and now it’s spurring unusual patterns in the U.S. equity market. Stocks almost always rise in the days before the country picks a president.
This year, they’re falling.
The S&P 500 has risen in the five days before the vote in 20 of the past 22 cycles, according to data compiled by Bloomberg and Bespoke Investment Group LLC.
While it has climbed an average 1.9% in the run-up to elections going back to 1928, it’s down 1.6% since Monday, with three market days including today left until polls open Nov. 8. The gauge fell 0.3% to 2,093.08 at 3:03 p.m. in New York, dropping for an eighth day.
“Until a week ago, the market calculated Hillary would win, but now the race seems to be on again,” says Christian Zogg, head of equity and fixed income at LLB Asset Management in Vaduz, Liechtenstein. “Nobody knows really what to expect from Trump, so the market is bound to get nervous. In addition, there is always the Fed hovering over the market.”
