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Christian Armbruester

Epilogue


The US elections are over and que sera, sera. All that remains is to see how our scorecard from last week performed. Bearing in mind that it’s still very early days and it will take more clarity on policy before financial markets find their equilibrium. Having said, this is where we are:


Equities called this right all the way. Record highs before the election, record highs thereafter, and everything is pointing to an orderly transition of power. Some stocks and indices moved more than others, with small caps and technology in demand. The rest of the world mostly underperformed. Europe led the way and the FTSE100 index lost 6% versus the S&P500 in a mere three days.


The bond markets had already priced in most of their dire expectations. Since September, three rate cuts were taken off the table. Initially, another one was taken off the board, but yields finally ended up where they were just prior to the election. Meat is back on the menu, inflation fears are here to stay, and the long end of the curve seems a frightening place to be.


The US Dollar also knew and continued to strengthen after the big event, particularly against the Euro and Yuan. That kept commodities from going anywhere and even Gold came off, in what could be a sign that the worst is over. That also seems to be the view of the risk markets, with the VIX index down 35% since Wednesday.


Cryptos also got it right. Up 27% since September, Bitcoin added another 15% after the party started. Which brings us to Trump Media and Technology Corporation (DJT). At first, the stock that is owned by the one who rules them all went up 92%. However, since then it has come off quite dramatically to settle down roughly where it came from on Tuesday. What does that mean? 

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