Media on Wolfers' research: “What financial markets think of the 2016 election”

October 25, 2016

According to most polls, public opinion shifted in marked favor of a Clinton presidency during the first Presidential debate of 2016, which took place on September 26. Justin Wolfers, who watched the debate while observing the real-time reactions of prediction markets and the S&P 500 futures market, writes about financial market responses to this shift in his October 20 Brookings paper (with Eric Zitzewitz), “What do financial markets think of the 2016 election?”

“Both [prediction and stock] markets were relatively tranquil in the period before and after the debate. But during the debate itself, both moved quite sharply,” writes Wolfers. “While the main U.S. financial markets were closed, overnight trading in S&P 500 futures reveal that this event…led financial market traders to sharply revise their assessment of the value of stocks. The December 2016 S&P 500 future rose in lockstep with Ms. Clinton’s election chances, suggesting that markets expect stocks to be more valuable under President Clinton than President Trump.”

Wolfers' paper and research have been cited heavily by the media this week. For more, read: