Mike’s Morning Brief: A fast-break rundown of what’s going on.
Market actually opens positive as the election shock of the century occurred. Global Markets were hit. The Futures Market got crushed overnight with the S&P down 100 points at one point. The DOW was down over 800 at the lows. But they reversed course rather quickly. In fact there are many areas within the Market that are jumping, namely Biotech’s, Financials, Defense, the price of Oil and Gold. A Trump administration will be pro-Energy. We have exposure in all of these areas in our portfolios. Mexico is getting hit. Treasuries have been whipsawed as well, with the 10-Year yield initially falling to 1.7% but opening the Wednesday session at 1.93%. This was such a bitterly contested election and the division in this nation is wide. Donald Trump’s acceptance speech was very graceful, which went a long way to provide Market relief. He said he plans to be the President for all Americans and reached out to those who didn’t support him. “Now it’s time for America to bind the wounds of division,” he said in a victory speech, calling on all Americans to come together. The Republicans also kept control of both the Senate and the House, giving the party greater freedom to implement its policy platform. The question now is will he embrace pro-growth policies or stick to his protectionist rhetoric. Tax reform could be at the top of the list. The US economy was already in growth mode, with many indicators of acceleration at play ahead of the election. That’s important. Emotions are very high. The Futures Market is re-pricing the probability of a rate hike in December now, going from a 77% chance to 66% now. There are still far more questions than answers. This was a complete shakeup which surprised everyone, including Trump’s team.
Keep those belts buckled,