Morning Commentary
Today is the day. Americans will vote in droves, and the experts say it’s too close to call. I suspect part of the reason is that the experts have pulled a lot of shenanigans. American politics has become a blood sport, and now even would-be impartial observers are not only wearing jerseys but are also blocking and tackling others.
So much is at stake.
The best any individual can do is vote and hope they are part of the crowd. This is, in fact, one of the few times I would like to be with the crowd, but I admit to casting my vote for the losing candidate more than I have for the winner.
There are specific issues for investors, but remember that we live in a $30.0 trillion economy with the world's most innovative companies and best-run businesses. No matter who wins, there will be opportunities to improve your prosperity, but we can never take our place in the world for granted.
Positioning Day
Some view yesterday’s session as a referendum on the election outcome. However, I see it as an intelligent strategy: investors cash in on winning positions while bottom-fishing in struggling sectors.
Energy (XLE) was the big winner, but was it Trump’s or Harris’ stock?
Crude oil surged the day after Biden won, and there is no doubt Harris would continue the war on fossil fuels. Ironically, this could give oil producers more pricing power than the free market.
Yesterday, the “Mag Seven” slipped, with Tesla (TSLA) taking it on the chin the most, but these are high Beta names.
Small-Caps Sensing a Win?
Small caps enjoyed the best outing of all factors in another “Trump” trade, led by quality names.
The Ten-Year Treasury Yield (TNX) stalled, but the parabolic move remains intact, as it puzzles the experts.
Earnings Reactions
Reaction to earnings continues to amaze – it’s ‘feast-or-famine.’ The 5.0% average reaction is the second largest on record (5.2%).
Market and Election Reaction
On election night 2016, the world watched Donald Trump pull off one of history's biggest presidential election upsets. As he raked up electoral college points, equity markets swooned. At one point, S&P 500 futures crashed by 6.0%. Hillary Clinton conceded, and Trump was humble in accepting victory.
The market turned higher and didn’t look back. Let's hope for fast results and an uncontested outcome.
Today’s Session
Most traders will spend all day trying to decipher the outcome of the election through a few proxies, like Trump Media & Technology Group Corp. (DJT) and Ten-Year Bond Yield for Trump, while watching Invesco Solar ETF (TAN) for Harris.
Comments |
Yesterday I was watching your show and my husband was working in the same room. At the end, he commented "Charles should run for President!" He was serious. Must say I agreed! Anita Ariail on 11/5/2024 10:15:58 AM |
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