“The presidential election is eight months away but ‘political risk’ is already being felt on Wall Street, as money and politics collide in a flurry. . .”

In this article, Adam Shell describes how the circus-like 2016 presidential race is creating uncertainty on Wall Street.  This uncertainty centers on the candidates and how they promise to deal with select industries, trade, tax policy, and globalization.

For example, many of Donald Trump’s campaign speeches are protectionist in nature and some on Wall Street worry that Trump will build a wall around the United States choking off globalization and world trade.

For Wall Street, Hilary Clinton is also problematic.  She has been a vocal critic of the pricing practices of the pharmaceutical industry.  She is also a proponent for more regulation on the financial industry and has suggested that banks involved in speculative investments should pay a “risk fee.”

As the campaigns develops between establishment and anti-establishment  candidates, it should be an interesting run up to the November elections that could impact Wall Street and investors.

For more information, click here.  

Teaching Suggestions                           

• You may want to use the information in this blog post and the original article to stress how politics, the financial industry, and investing are intertwined.

Discussion Questions

1. How do you think the uncertainty associated with this presidential election affects the financial markets and investing?
2. Why could protectionism hurt the U.S. economy and Wall Street investors?
3. Is globalization good for the U.S. economy? Is it good for investors?