Dave Lutz, head of Exchange Traded Funds at JonesTrading, has a quick overview of what traders are talking about on Wednesday.
Obviously, it’s one thing: Donald Trump’s shocking election win.
However, investors are shifting focus to how President Trump’s infrastructure spending and tax-cut plans would be friendly to Wall Street. That’s slowing the panic buying into Treasuries. Stock futures are also above their worst levels of the night.
Good Morning! Not only did Trump Win, but the GOP held the Senate (and House). Ohio wasn’t even close. 52%-43%. He took PA and WI by 1%. They haven’t called Michigan yet, but he’s leading. Exit polls suggest Clinton did not succeed in winning the youth vote, to the extent that her predecessor did. Fifty-five per cent of young people aged 18-29 supported her, far short of the 63 per cent support which contributed to Obama’s victory in 2012 — I’d hate to be Paul Ryan this AM.
Some Bullets that I am talking about in the Chatrooms:
- At the lows, S&P Futures (-5%) were locked limit down (ESZ6 2028.50), USDJPY was below 102, USGG10YR was nearing 1.70, Peso had collapsed 13% and Gold has surged nearly 5%. “The test for US equities today will be whether the S&P 500 can hold its 200-day moving average. Friday’s low was just above that support level, and today it comes in at 2086.91.”
- 10YY has ripped higher to 1.95% as investors focus on the heavy Spending / Tax Cutting Policies that will be pushed thru a friendly Congress. Fed Rate-Hike Odds for Dec. Drop to 54% Based on Futures Pricing.
- His Speech seemed to sooth nerves from the lows – He said he was “reaching out” to the people who had not supported him to “unify the country” – “We will get along with all other nations willing to get along with us. We will deal fairly with everyone. We will seek common ground, partnership not conflict.”
- Our London Desk notes that “Volumes are monstrous + 150% across the board but mainly futures lead, main trading desks are relatively quiet” – FTSE rallied to up on day but slipping now as $/£ rallies. The export-heavy auto sector getting clubbed in the Stoxx Europe 600, shedding over 3%.
- Japan’s Nikkei Stock Average shed 5.4%, its biggest loss since Britain’s June referendum – Gold and Coal Stocks propelled China into the Green tho.
- Market feels good to me here. There was a gaggle of protection put on into this Election. Trump’s Speech was actually presidential and “healing”- and his Policies on Infrastructure and Taxation are very Spoo Friendly (more in WTAW later.)
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