Results are coming in for the U.S. Presidential election between Democratic incumbent Barack Obama and Republican challenger Mitt Romney. S&P 500 futures have dipped since polling results started to come in, and are now down 9.7 points.
President Obama is projected by U.S. television networks to have won in both Wisconsin, a Midwest swing state, and Pennsylvania, where Romney made a late play to try to grab the state.
BONNIE BAHA, HEAD OF GLOBAL DEVELOPED CREDIT AT DOUBLELINE CAPITAL LP, LOS ANGELES, CALIFORNIA:
"China equities trading down as are U.S. equities. Curious. China pricing in a Romney win and U.S. pricing in an Obama win. Still too close to call. Don't know what bond futures are doing. That's the key. Florida and Ohio still not in yet but Pennsylvania just called for Obama. This election has the potential for three or more Floridas."
TODD SCHOENBERGER, MANAGING PRINCIPAL AT THE BLACKBAY GROUP IN NEW YORK:
"Futures are selling off right now because there's a feeling we may not have an absolute winner as we go through the night. We don't want Florida to be the decision maker again, and right now it looks like we may be going back to what we had between Bush and Gore in 2000.
"It's like, here we go again. One of the issues is that Florida has an automatic recount if the margin is 1 percent or less between the two candidates. We don't want to have to wait several days for a result. What we hate on Wall Street is uncertainty. We rallied today (Tuesday's session) because we thought this mess would be put behind us.
"I'm paying some attention to the legislative races, but we would've needed to see a change in the control of the Senate in order for Obamacare to have any chance of being overruled, that's even if Romney wins. It doesn't look like that will happen, and if both houses stay under the same leadership, that suggests we will see continued gridlock."
DAVID JOY, CHIEF MARKET STRATEGIST AT AMERIPRISE FINANCIAL IN BOSTON:
"I expect a short-term reaction no matter who ends up winning. If Romney wins, the reaction will probably be positive, and if Obama wins it might be slightly negative, but no matter what, it will be short-lived. Soon investors will start focusing on the fiscal cliff and what progress will be made there.
"The next day or so should wash out the impact of the election, but we'll be in a state of limbo until we know the results. We've seen some volatile trading lately, but I'm not concerned about legal challenges to state results. That would really leave markets in a bind, but I don't think this is such a close race that we're counting ballots by hand. It doesn't look like Romney will win Ohio, and if he loses Florida early on, it probably won't be a late night.
"Almost as important is what happens in terms of the make-up of the congress. If we have a divided government like we do now, that will be viewed as a modest disappointment since that configuration has resulted in gridlock and there's no clear path towards unlocking that. Though this is a long-shot, if the Republicans do really well in state races and they control both houses, they might just veto everything over the next four years. That wouldn't be constructive at all. So the composition of congress is extremely important in all this, and it holds implications for how quickly we resolve the fiscal cliff issue, or whether it gets resolved at all."
(Americas Economics and Markets Desk; +1-646 223-6300)