There’s been nothing ambiguous about investors’ collective reaction to the election of Donald Trump.
Once it became clear that the brazen billionaire had pulled off the unthinkable, US futs collapsed, only to rebound in the blink of an eye after what was variously described as a conciliatory victory speech.
After that, it was off to the races for US equities. Treasurys sold off hard and the dollar soared. The reflation trade had arrived.
Things have calmed down a bit over the last several sessions as the market seems to be a bit gun-shy ahead of Trump’s inauguration which promises to be a raucous event.
For those wondering how stocks have performed in the past immediately after the passing of the White House keys, look no further than the following chart from Barclays which shows that historically speaking, equities tend to consolidate after inauguration day:
Of course we can probably toss out the historical record for this one. Judging by the number and scope of planned protests, this time might truly “be different.”
Latest summary from USA Today:
At least 26 protest groups are seeking or have been granted permits – more than four times the average number for past inaugurations – in a show of force that will likely test a sprawling security operation.
In total, nearly 400,000 demonstrators were anticipated as of Friday, according to National Park Service records, with more than half of those expected to participate in the Women’s March on Washington, a coalition of civil and human rights advocates, scheduled to parade through D.C. the day following Trump’s Jan 20 swearing-in.
Bonus chart (responses to the question “have you changed your allocations post-election?”from Barclays global macro survey):