Global banks expect trading volumes and volatility to spike after the U.S. presidential election, so they’re boosting staff and taking precaution. Fred Katayama reports.
(REUTERS / NYSE) – Big global banks are bracing for possible tumult the day after the U.S. presidential election. They expect trading volumes and volatility to spike. That’s what happened in June when Britain voted to leave the European Union. Taking precaution, Morgan Stanley told staff to consider using stop-loss orders. That’s the automated trading mechanism that sells an investor’s position once the stock hits a pre-determined level. And it told its financial advisors to prep for a lot of conversations related to the election.
In London and Hong Kong, HSBC added staff on trading floors to deal with client requests. Societe Generale is increasing front office, back office, and tech staff.
Traders expect U.S. stock prices will swing about 2 percent in either direction on Wednesday. Investors see Democrat Hillary Clinton as the status quo candidate and Republican Donald Trump as sparking uncertainty because of his stance on foreign policy, immigration and trade. If Trump wins, Citigroup sees the S&P 500 falling up to 5 percent, and Japanese brokerage Nomura says Asian stocks could drop more than 6 percent.