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Stock futures, dollar, yields show investors leaning

toward

Trump win

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Election results could impact U.S. tax, trade policy

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Investors wary of unclear or contested results fueling

market

volatility

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Bets on election outcome sway markets, influencing assets

linked

to Trump

(Recasts)

By Lewis Krauskopf and Suzanne McGee

NEW YORK, Nov 5 (Reuters) - Global investors on Tuesday

were closely watching key local races in the U.S. presidential

election, with trades starting to lean toward pricing in a

Donald Trump win, although many said it was still too early to

tell.

U.S. stock futures and the dollar pushed higher while

Treasury yields climbed and bitcoin rose, suggesting trades

favoring a Trump win over Democrat Kamala Harris.

"Our county by county analysis in key states suggests that

Harris is lagging vs 2020, and on this basis it is logical that

the market is starting to price a Trump win, as seen in bonds,

and the dollar," said Jens Nordvig, CEO at analytical firm

Exante.

But the contest remained undecided with critical

battleground states unlikely to be called for hours or even days

and some investors saying the so-called Trump trades lacked

conviction.

"Everyone's trying to take the few inches of data we've got

right now and turn it into a mile," said Alex Morris, president

and CIO of F/m Investments in Washington, DC.

The early results underscore how one of the most unusual -

and tightest - presidential elections in modern U.S. history

could have starkly different outcomes for tax and trade policy,

as well as for U.S. institutions.

The results could rattle assets globally and determine the

outlook for U.S. debt, the strength of the dollar and a host of

industries that make up the backbone of Corporate America.

Leading into Tuesday, polls showed a dead heat between the

former president and the current vice president. In line with

expectations, Trump won 15 Republican-leaning states shortly

before 10:00 pm ET, while Harris had captured seven Democratic

states, Edison Research projected.

But the battleground states that will decide the race may

not report results until late Tuesday night or Wednesday,

leaving investors scouring tallies from a handful of bellwether

counties that may offer early clues about who will take the

White House.

For example, in Florida's Miami-Dade county, which voted

Democratic during the previous two presidential elections, Trump

had 55.4% of the vote versus Harris' 43.8%, with 87% of the

votes counted, according to Edison Research.

Harris, meanwhile, made progress in Wake County, North

Carolina, with 78% of votes in, showing 64% for Harris. Beacon

Policy Advisors in Washington had said ahead of the vote that a

strong showing for Harris there could bode well for the vice

president.

Despite the uncertainty, popular election betting platforms

leaned heavily in Trump's favor, while trades in assets whose

prices could be influenced by Trump's pledges to raise tariffs,

cut taxes and slash regulations showed growing bets on a Trump

victory on Tuesday evening.

Shares of Trump Media and Technology Group ( DJT ) surged

10% in extended trade after a volatile day session, while the

Mexican peso, which could be hit by tariffs, weakened

about 2.5%.

"There's not a lot of conviction in these moves; it seems

like these are little pops," said Brian Jacobsen, chief

economist at Annex Wealth Management.

CONTESTED VOTE?

With Congress also to be decided by wafer-thin margins,

investors are wary of prolonged vote counts and contested

results that could fuel volatility. The final outcome for both

the presidency and Congress could take days to be known,

analysts had warned.

But several investors said early results suggested markets

would have clarity faster than in 2020, when Joe Biden was

announced the victor some four days after election night.

"That's what markets have been most worried about, that

there would be a long, drawn-out fight over who won," said Jamie

Cox, managing partner at Harris Financial Group.

"Being able to get a decisive winner, whoever it is, is

going to be good for the market and that's what's reflected,

both in today's performance and also the futures right now."

Joe Mazzola, head of derivatives and options trading at

Charles Schwab, said the real test for markets would likely come

on Wednesday morning as traders began to digest the results,

adding that Tuesday was "the calm before the storm."

Elsewhere on Wall Street, some bankers, investors and

analysts said they were waiting out the count - in some cases

anxiously - with friends and family, while traders were buckling

in for a long night.

Joe McCann, CEO of Asymmetric, a macro hedge fund that

trades primarily in cryptocurrencies, said he has been tracking

election news on several TV screens and monitoring market

movements in his 50th floor Miami penthouse.

"We have not left this room all day," he said. "We are

expecting a volatile night."