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2016.11.0723:36:00UTC+00U.S. Banks Brace for Potential Market Turbulence Following U.S. Election

U.S. banks such as Morgan Stanley, Goldman Sachs Inc. and JPMorgan Chase & Co. have taken precautionary measures ahead of a possible turmoil on financial markets in the aftermath of Tuesday's U.S. election.

Morgan Stanley has instructed its employees to consider using stop-loss orders if the election outcome causes trading volumes and volatility to surge. In a memo, the lender also told its financial advisers to get ready for election-related discussions with its customers.

When the results start to come in on Tuesday night, JPMorgan stated it will have additional traders on duty in New York to support its Asian trading team if there is a spike in trading volume. Citigroup also stated it will have an overnight team in New York on the trading floor to prepare for the surge in trading activity.

Banks including Morgan Stanley, JPMorgan, Goldman Sachs, Citigroup, Bank of America Corp. and Wells Fargo & Co. outlined identical plans to hold a conference call on Wednesday morning to discuss election results and its possible implications with customers and other concerned parties.

Traders are expecting stock prices to oscillate by about 2% in either directions the day after the election, while some banks are estimating a more extreme scenario in case of a win by Republican Donald Trump. Citigroup estimates that a Trump win could prompt a 5% sell-off in U.S. stocks.

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