Complacent Investors Ignore Clinton Emails at their Own RiskThe Market and Political View from Adam Jepsen, Founder, Financial Spreads.
With Friday's news that the FBI is looking into Hillary Clinton's emails again we saw brisk selling of the US dollar, Dow Jones and S&P 500.
However, those markets are now back to, or very close to, the levels they were trading at on Thursday.
The problem for the markets is that Clinton looks to be priced in. If Trump wins there could be some very sharp selling and investors seem to be ignoring this risk, also see Double Trouble For the Markets if Trump Wins.
- - - Financial Markets vs Bookmaker Disparity - - -
While the dollar and US stocks have recovered from the shock of the new FBI probe, the bookmakers have reacted differently.
Before the news broke, the Republican's campaign was on the back foot and he was priced 5/1, i.e. he had a 15-20% chance of becoming President.
With Clinton now on the defensive, the odds of a Trump win have shortened. He's now between 3/1 and 4/1, i.e. the bookmakers now put the chances of a Trump Presidency at 20-25%.