Markets fall ahead of Clinton-Trump debate

Stock markets around the world closed down on Monday, driven, in part, by growing concerns about the US presidential electionahead of the first debate.

Market indexes on Wall Street fell nearly 1 percent on Monday, following markets in Europe and Japan that all closed down.

Stock markets are generally more inclined towards conservative, Republican, candidates because they prefer less regulation - leaving markets to their own devices.

But markets also like reliability and known entities. In this case the Democratic presidential candidate Hillary Clinton is the known political entity, having been on the national stage for the past 25 years.

On the other hand, Republican candidate Donald Trump has zero political experience, having never even run for, never mind held, political office. His lack of experience is exacerbated by his unpredictable and often bombastic comments.

This is giving the markets jitters as the two candidates prepare to face off Monday night in the first of three debates, according to Peter Cardillo, chief economist at First Standard Financial.

"The market is beginning to realize that it may not be an easy win for Clinton," Cardillo said. "Normally a Republican win would be positive for the stock market, but with Trump it may create a lot of uncertainties."

Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma agreed - with one caveat.

"Wall Street favors Hillary at this point because she is a known commodity. Trump is a wild card," he said. "But I don't think it's too late for Wall Street to warm up to Trump."

A market chill

For now, at least, the prospect of a Trump presidency is sending a chill through the markets, with indexes in Asia and Europe down more than 1 percent.

The three major indexes in New York - the Dow Jones Industrial Average, the S&P 500 and the NASDAQ - were each down 0.9 percent on Monday.

Nearly two months ago - coming out of the party nominating conventions - Clinton seemed to be on a glide path to the White House, with polls showing her with a discernible, if not comfortable, lead.

That has all but vanished now as the two candidates are essentially neck-and-neck, though Clinton retains a slight edge.

To be sure, anxiety about a possible Trump presidency was not the only factor driving stocks down Monday.

The German government's refusal to inject capital into the troubled Deutsche Bank sent the bank's shares tumbling more than 7 percent in New York. The selloff spilled over into US banks, including Bank of America and Goldman Sachs - both losing more than 2 percent

Rupert Baker, a European equity sales executive at Mirabaud Securities, expects European markets to stagnate until the US decides on its next president.

"We're not really going to go anywhere on European markets," Baker said, "until the November election."

bik/rc (Reuters, AP, AFP)