With only a day until Election Day, it's safe to assume that investors around the world are anxiously waiting to see who will come out on top. European markets rallied Monday after the FBI announced Sunday it was dropping the investigation into the Democratic candidate Hillary Clinton's use of a private email server following a review of newly discovered emails from an unrelated investigation of Anthony Weiner, the estranged husband of top Clinton aide Huma Abedin.
But while many people are talking about how U.S. markets might react — many say a Donald Trump win would cause more volatility — there are a number of other countries that could see their own markets fluctuate after the polls close, especially ones in emerging markets.
So far this year, developing-nation stocks are up the most they've been in seven years. Year-to-date, the MSCI Emerging Markets Index has risen by nearly 13 percent, with some countries, such as a Brazil, Russia and Peru, up well over 70 percent. As good as a run as it has been, though, some people are worried that the election, and in particular a Trump win, will derail these gains.
In September, Citigroup released a report saying that the MSCI Emerging Market Index would fall by about 10 percent if Trump wins, in part because emerging market currencies would weaken against the U.S. dollar. The main concern is that any tough action on trade — he says he wants to renegotiate NAFTA and scrap the TPP — would harm developing nations that sell their goods in America.
"In a worst-case scenario, if the U.S. is less driven to trade globally, and where immigration becomes more of an issue, then clearly emerging markets would suffer," said Julio Zamora, a managing director at Citigroup.