Here Is Your ‘Last Chance’ Tactical Election Rundown
Having delivered on what I felt was an editorial obligation to mark the US election with one of the signature, visceral, “slice of life” pieces regular readers have become so fond of over the years, I wanted to briefly recap the tactical setup and reiterate a few points about possible post-election market reactions.
Global equities were aggressively "risk-on" headed into the US cash session Tuesday, and rates responded accordingly, with yields higher and curves steeper. The dollar was sharp
“Gridlock” in DC is good for markets. A realization I’ve come to lately is that the supposed effect on market happiness is not the aim. Gridlock is good for markets is just one more psyop.
The inaction that gridlock refers to is the stale, and crufty along the edges, state of affairs in many different areas of our governance and society. Essentially, the lack of progress on so many issues benefits the clans and minority who wish to hold on to things as they are. For if affairs are adjusted and tweaked for the betterment of all, those hangers on would find their advantage no longer applies.
Well, yes. If you’re part of the SP500, you’re already one of the society’s winners (‘you’ being a company here). So, for you, the status quo is frankly quite good vs. change that could make things even better but most likely won’t.
Gridlock is not good in a crisis, which is where we are. Nor is an incompetent executive branch of government.
Great nuanced overview of possible outcomes, I agree it is not possible to hedge your “science fiction” scenario of a hard final turn into autocracy in the US, off course if we listen to Tom Lee, it is time buy now anyway because the market is going higher even if a meteor strikes the planet while the US delves into civil war after Trump invalidates the election, win-win.
given VIX positioning and VIX put/call ratio, the above idea strikes me as nonsense. Market is positioning for risk premium to collapse post-election already plus this is probably consistent with Blue Wave aka 538 being a 75% probability, Agree gridlock is not good
The revolution will not be televised.