S&P 500 just breached the 2100 magical support level, lowest since July 7th. How did we get here?
Everything has been rosy since Brexit. We haven’t hiked rates yet in 2016 and Clinton has been leading in every poll conducted by MSM by 5-10 points, regardless of the liberal corruption and current Weinergate investigation.
The market is trying to protect itself by discounting a Trump win in light of all the hits the liberals have taken in the past few weeks. If the polls are real (they aren’t), we shouldn’t have to worry about a Trump win. I think you could expect some volatile trading this next week with the Fed meeting, NFP, and the election of course. People will try to frontrun what they think will happen and this should create some good trading opportunities for everyone.
This scenario is very reminiscent of Brexit. A week leading up to the vote, the market rallied 2% but then sold off 5+% in 2 days. We could be seeing the reverse of this play out now, as the market is trading lower into the election waiting for a Hillary win to rip higher. If Hillary wins and the market continues lower, all bets are off.
Part of the reason Wall Street is worried about a Trump win is that he claimed he would essentially abolish the Fed. Ya right. He loves money just as much as the rest of us. Abolishing the Fed and taking away our candy would be a poor choice as we have all come to rely on stocks being forever at ATHs.
I still don’t get the argument of Trump is bad and Hillary is good for Wall Street. They could both be bad and they could both be good. If Trump wins and we sell off, is it because we’ve had an 8 year bull market and are due for a correction or is it based on his future political agenda? Just because Democrats have statistically performed better in the past does not mean it’s a future predictor. Many of these could be outliers, just like the Hoover administration. No administration is created equal and outside events affect the markets not the people running the country. Obama inherited the Great Recession, if it would have been a Republican instead, don’t you think we would have done just as well or better? It’s a question that no one can answer with any high level of certainty. I think trading off of seasonality type trends like this is just outright foolish.
I pray that we all get through these times of darkness and that we return to ATHs for the sake of our retirements, regardless of which corrupt leader we elect next week.
#VoteRamp
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