Markets volatility

From ‘Chaos’ To ‘Blue Wave Mania’: Nomura’s McElligott On Election ‘Narrative Overshoots’

Observing the evolution of the election narrative through the market's beer goggles has been quite something to behold over the past couple of months. It's not entirely clear there's ever been much in the way of "consensus," but there were two distinct storylines that received some measure of market "buy-in" (figuratively and literally) from August through October. One narrative was that America might be headed for the worst domestic crisis since the Civil War. Donald Trump's refusal to commit to a peaceable transition of power stoked those fears, and when he doubled (and tripled) down on that refusal, some market participants were forced to begrudgingly accept the notion that the "science fiction" scenario (in which Trump asserts autocratic powers) was a non-zero probability outcome. Far-fetched? Well, sure. Totally far-fetched. But non-zero, nevertheless. That narrative gave way in late September/early October to "blue sweep" fever, as Trump's performance (and it really was a "performance") during the first debate coupled with his COVID-19 diagnosis, prompted many to assume that "The Apprentice: White House" was likely to be canceled after its fourth season. Recall the spike i
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8 comments on “From ‘Chaos’ To ‘Blue Wave Mania’: Nomura’s McElligott On Election ‘Narrative Overshoots’

  1. Ria says:

    His theories about the election are nice. From all reports turnout looks like it is going to be very high. High turnout usually does not mean the population is happy. So while Wall Street strategists musings are interesting and on a high level the possibility of a Republican Senate and a Democratic House and White House exists, the events on the ground seem to contradict this outcome. The money flows to candidates also seem to contradict a split verdict as well. Greg Valliere is another Wall Street strategists- he even focuses on politics and Washington for his clients- he is more often wrong than right. Caveat emptor.

  2. Tom Swift says:

    Please please please let there be a Blue Wave.
    The Autocrat-in-Training signed an Executive Order yesterday that Federal civil servants must sign a loyaty pledge to him on 01/19/2010.
    If President Donald High Funtioning Asperger gains another 4 years, I predict there will be a bunch of old hippies digging out their copies of “The Anarchist Cookbook” for their children and grandchildren.
    I’m still holding onto my cash and a little bag of TZA.

  3. derek says:

    We are not hearing much from Grover Norquist, are we. Or even former presidential aspirant Paul Ryan.

    At least ol’ Grover was honest about his goal = defund government so as to eliminate social spending. Ryan was not so forthcoming.

  4. Emptynester says:

    Spending, no matter whom is elected.
    If by a “ flip of the coin”, Republicans hold the Senate, then Congress will miraculously “compromise” and both parties will get most of what each side wants. Neither party is afraid of deficits- the past decade plus has shown that to be true- they each just want to control where it gets spent.

  5. SingSing says:

    Gut feel – Biden FTW. Reason, it was darn close last time. Trump has spent the last four years alienating as many people as possible, so it’s doubtful anyone is dumb enough to have converted to his cause, and he likely p*ssed off some of his existing Trumpanzees. So it’s an uphill struggle already. Plus, high turnout suggests citizen dissatisfaction, who with? The incandescently incoherent incumbent.

    • jyl says:

      Biden victory alone, w/ GOP Senate, is a recipe for gridlock. The odds for Dem Senate are lower than the odds for Biden President. The full-on Blue Wave scenario needs both.

    • PJSPHD says:

      I hope it is Biden. It was close last time, but Hilary was not likable. I believe some of the distaste for her was pure sexism, but much of it deserved because of her elitist attitude. “Deplorables” was a major misread, which Trump owned to the everlasting joy of his base.

      I think Biden is. likable. At worst he’s neutral on the personality scale. I thought his Warm Springs speech today was good and I’ve spent a lifetime analyzing public rhetoric. When history compares Warm Springs against Trump making fun of someone with cerebral palsy, they will weep.

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