Risk-On It’s Trump Trades
Markets did a good job positioning for election results – the upswing in yields coinciding with S&P 500, Nasdaq and Russell 2000 (smallcaps took less than 15min after the opening bell to recover) was the telltale, providing for most easy (you may say almost risk-free) intraday long gains in ES and NDX well before the voting ended.
No trepidation or flush came as results started trickling in – apart from the below summary of what election results mean for the markets and economy, I‘ve highlighted the USD upswing (against both the euro and yen), headwind for China stocks, and in general the inflation trades benefiting as markets count on more national debt coupled with protectionist policies. Hello, industrials.
I‘ll be featuring the usual comprehensive daily set of charts only tomorrow as the digestion of election results will be most insightful after a full day of US trading – be ready for plenty of live updates across Telegram and Twitter, as you‘re used to after all the years and as fits my style. I‘ll just feature the dollar chart of the moment (courtesy of www.stockcharts.com) and say it‘s not yet the time to start catching the falling knife in real assets.
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