Daily Market Update – November 9, 2016

 

 

Daily Market Update –  November 9, 2016 (7:30 AM)


What can you say about today?

The day after the election day that everyone got wrong?

Well, at least the early going 800 point loss in the DJIA futures has been pared by 500 points and maybe we’re looking at an economy ahead that could get a large infrastructure boost.

A much needed one at the expense of the deficit.

Maybe that should have been done 8 years ago and people would have been put back to work much sooner than 2016.

Hang on, but I don’t think it will be as bad over the next few days as I might have thought as recently as yesterday.

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Daily Market Update – November 8, 2016 (Close)

 

 

Daily Market Update –  November 8, 2016 (Close)


Yesterday the market made it pretty clear that it didn’t like the uncertainty that they perceived with a Trump victory.

The association between the market’s sudden decline when news suggesting that there may have been more emails to be discovered and the surge when the all clear was given, was pretty undeniable.

The market views one side far more favorably than another, even as it has usually been wrong about which side to favor for the past generation or two.

This time they may be right, but not because of any individual, more because the trend is in the direction that will take the swinging pendulum of an economy over to the side of economic growth.

It was likely going to happen anyway, barring some horrible disaster or truly terrible policy decisions.

Even the lesser wanted of the 2 candidates would not likely be able to introduce such drastic policy decisions and to do so quickly enough to warrant the kind of reaction to the very thought of his victory.

I just enjoyed watching yesterday’s move higher and despite today’s seeming calm, there may be more in store tomorrow.

The question is really what happens after tomorrow?

At some point soon there has to be a realization that all signs are now for a rate hike in December, unless we get terrible retail earnings news this week.

Does the market look at that rate hike, now that it is almost guaranteed as the enemy or as a friend welcoming all into the great things that await in the economy?

Logic tells you that it should be the latter, especially at this early stage of interest rate increases.

History bears out the logic in using logic, but no one knows if the market will see it that way.

It did for a brief moment or two this time last year, but then may have gotten spooked by the thought of even more rate increases that never came.

That’s where this time around may be different.

Employment is higher and wages are moving higher. With evidence of GDP growth the time may finally be here for a series of rate hikes and at some point it will become burdensome.

That’s what a pendulum is all about.

Today the pendulum just kept swinging a little more, but those early election results are going to have to change if the pendulum is to keep moving in that direction.

This is one case that I don’t expect an immediate sell on the news in the event of the expected outcome.

It’s the unexpected that should always be frightening, though.

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Daily market Update – November 8, 2016

 

 

Daily Market Update –  November 8, 2016 (7:30 AM)


Yesterday the market made it pretty clear that it didn’t like the uncertainty that they perceived with a Trump victory.

The association between the market’s sudden decline when news suggesting that there may have been more emails to be discovered and the surge when the all clear was given, was pretty undeniable.

The market views one side far more favorably than another, even as it has usually been wrong about which side to favor for the past generation or two.

This time they may be right, but not because of any individual, more because the trend is in the direction that will take the swinging pendulum of an economy over to the side of economic growth.

It was likely going to happen anyway, barring some horrible disaster or truly terrible policy decisions.

Even the lesser wanted of the 2 candidates would not likely be able to introduce such drastic policy decisions and to do so quickly enough to warrant the kind of reaction to the very thought of his victory.

I just enjoyed watching yesterday’s move higher and despite today’s seeming calm, there may be more in store tomorrow.

The question is really what happens after tomorrow?

At some point soon there has to be a realization that all signs are now for a rate hike in December, unless we get terrible retail earnings news this week.

Does the market look at that rate hike, now that it is almost guaranteed as the enemy or as a friend welcoming all into the great things that await in the economy?

Logic tells you that it should be the latter, especially at this early stage of interest rate increases.

History bears out the logic in using logic, but no one knows if the market will see it that way.

It did for a brief moment or two this time last year, but then may have gotten spooked by the thought of even more rate increases that never came.

That’s where this time around may be different.

Employment is higher and wages are moving higher. With evidence of GDP growth the time may finally be here for a series of rate hikes and at some point it will become burdensome.

That’s what a pendulum is all about.

.


Daily Market Update – November 7, 2016 (Close)

 

 

Daily Market Update –  November 7, 2016 (Close)


Early yesterday evening the S&P 500 futures were expressing a strong desire to break the 9 day long streak that broke a 36 year record for consecutive daily losses.

It may be coincidental, but after a week in which the declines were based on growing concerns that Donald Trump could find a path to 270 electoral votes, the evening’s strong advance came as some of the air was let out of the sails.

In the early trading the market was up nearly 1.5%, perhaps strengthening the belief that a Clinton victory could recoup everything that was lost in the previous 9 sessions.

The alternative, a Trump victory, could possibly then be the next step in taking the current 5% decline into correction territory.

Other than the election and lots of retailers reporting earnings this week, there really isn’t too much going on.

The market didn’t care and once it opened up for real, it just got stronger and stronger, ending the day almost 2.5% higher.

And, there may still be more to come.

A Clinton victory and some good retail guidance will almost assure FOMC action next month and I think the former alone will lead to a buying spree, as will the latter.

I don’t have much going on this week.

Just a single position set to expire and a single ex-dividend position.

If the market decides to continue with a large rally to start the week or in response to the election, I’m more than happy to just go along for the ride.

Today was a good start.

I wouldn’t mind that continuing to be the case and perhaps being in better position the following week to either see some assignments or at least get to do some rollovers.

At this point, I would just like to see some certainty, even if the answers aren’t what I would have wanted to have heard.

Still, 2016 has been good to me and could even get much better with another climb by energy and commodity prices.

.


Daily Market Update – November 7, 2016

 

 

Daily Market Update –  November 7, 2016 (7:30 AM)


Early yesterday evening the S&P 500 futures were expressing a strong desire to break the 9 day long streak that broke a 26 year record for consecutive daily losses.

It may be coincidental, but after a week in which the declines were based on growing concerns that Donald Trump could find a path to 270 electoral votes, the evening’s strong advance came as some of the air was let out of the sails.

In the early trading the market was up nearly 1.5%, perhaps strengthening the belief that a Clinton victory could recoup everything that was lost in the previous 9 sessions.

The alternative, a Trump victory, could possibly then be the next step in taking the current 5% decline into correction territory.

Other than the election and lots of retailers reporting earnings this week, there really isn’t too much going on.

A Clinton victory and some good retail guidance will almost assure FOMC action next month and I think the former alone will lead to a buying spree, as will the latter.

I don’t have much going on this week.

Just a single position set to expire and a single ex-dividend position.

If the market decides to continue with a large rally to start the week or in response to the election, I’m more than happy to just go along for the ride.

I wouldn’t mind that being the case and perhaps being in better position the following week to either see some assignments or at least get to do some rollovers.

At this point, I would just like to see some certainty, even if the answers aren’t what I would have wanted to have heard.

Still, 2016 has been good to me and could even get much better with another climb by energy and commodity prices.

.