WASHINGTON – This week’s suddenly revived Trump Rally continued Wednesday morning. Except that the shocking, sloppy electoral mess we saw last night continues. Though this week’s stock market rally continues – big time — the chaotic uncertainty over Election 2020’s bizarre stalemate will likely drag on indefinitely. At the moment, a pre-positioned bipartisan phalanx of lawyers is readying an avalanche of invoices for both political parties as they prepare to litigate like hell.
One guess as to why the stock market rally continues, despite political chaos
Despite its absurdly anti-Trump homepage headlines Wednesday morning – borrowed, no doubt, from the hyper partisan hacks at NBC – the otherwise generally reliable business site CNBC lays Wednesday’s action out straight.
“U.S. stocks climbed on Wednesday, led by tech shares, even as the results of the presidential contest so far failed to yield a clear winner.
“The Dow Jones Industrial Average jumped 610 points, or 2.2%. The S&P 500 traded 2.8% higher. The tech-heavy Nasdaq Composite popped 3.8% as investors crowded back into the trade that’s been working for most of this tumultuous year.
“‘I think the big news for the markets right now at least as it looks preliminary is that there’s not going to be a blue wave, which is generally supportive for markets,’ said Mike Lewis, managing director of U.S. equity cash trading at Barclays, on CNBC’s ‘Squawk Box.’ ‘I think that the outlook going forward for markets is this is going to be more about policy and the Fed than it’s going to be about politics, which is a good thing for markets.’”
It’s now 11.27 a.m. Wednesday. The above clip was written a couple of hours ago, but Mr Market is still tracking in roughly the same territory: massively bullish. For whatever reason, the November stock market rally continues.
Nobody, except maybe for the Communist underground, expected today’s election non-results
We have to admit, this was not the kind of action we expected this morning, given that the networks are already hyping a genuinely dubious Biden victory. But Lewis’ suggestion may be on target.
Traders and investors prefer certainty. And they didn’t get that in today’s Election 2020 stalemate, at least thus far.
Except that, as Lewis notes, the dreaded “blue wave,” referring to a complete congressional takeover by the increasingly socialistic Democrats, has apparently not occurred. Cocaine Mitch will apparently get another two years as Senate Majority Leader, putting a crimp in any radical attempt to transform the US into a People’s Republic overnight. Or any ill-advised attempt to stuff the Supreme Court with Pol Pot lookalikes.
For now, that may be enough “certainty” for investors.
More on that Election 2020 stalemate: An eventual lasting effect? Violence next?
That said, Lewis’ thesis is vaguely unsettling, as it doesn’t address the problem at the top of the ticket: namely that, at the end of the day, the ultimate “winner” will never be accepted as legit by the other side in this seriously polarized country. That in turn could mean an instant and far more disastrous replay of this summer’s pro-Communist riots in urban America.
Indeed, the nation’s capital city, Washington, D.C., experienced surprisingly bloody violence Tuesday night as a small band of increasingly bold and violent Antifa thugs stabbed at least 4 pro-Trump supporters. That could be the appetizer if the electoral ambiguity at the top persists.
Whatever the case the massive Wednesday market rally continues
At any rate, we have what we have right now is a huge stock market rally. That’s particularly evident in Tech. The tech-heavy NASDAQ now up a whopping 447+ points at 11:37 a.m. ET. That’s an utterly astounding 4% gain thus far, and the NAZZ seems headed even higher.
(UPDATE: as of the noon hour, the NASDAQ is up over 700 points.)
Of course, Trump supporters could argue that Big Tech played a decisive, if nefarious role in today’s ongoing chaos. The sheer power of that perception could easily make this sector the undisputed King of the Investing Hill. At least for today. Who knows what happens longer term?
For this writer at least, it’s impossible to opine where stocks go next. But now, at least, investors seem to feel awfully happy about something. And that something could later include a dubious victory celebration by either party standard bearer.
Once again, stocks seem to be reacting more to headlines they like instead of behaving according to the charts. Or hewing to the fundamental analysis numbers old-timers still like to crunch. That makes things risky.
Signing out. For now.
We’ll cap this column today with no advice or suggestions at all. Which is prudent, since we don’t know what we’re going to do next, either. Except that for now, we’ll ride the rally. Tomorrow is another adventure.
Stay tuned and stay safe.
– Headline image: Via Wikipedia caption: A specialised ballot box used to assist ballot stuffing, featured in Frank Leslie’s Illustrated Newspaper in 1856. In the public domain.