How did Donald Trump's historic Election Day victory alter financial markets?
We recently introduced our Trump Tracker to monitor just that. The macro moves since November 8th have been nothing short of remarkable (even if the initial exuberance is dissipating a bit). Here is a look at the performance of various asset classes since Election Day, compared against the 1-day percent change in Monday's trading:
- Aluminum: +17.3% (since 11/8); -2.5% (on 11/28)
- US Dollar/Mexican Peso: +12.6%; -0.1%
- Russell 2000: +11.3%; -1.3%
- Financials (XLF): +10.8%; -1.2%
- Biotech (IBB): +7.0%; -1.6%
- Industrials (XLI): +7.0%; -0.7%
- U.S. Dollar Index: +3.5%; -0.2%
- 10-year Treasury yield: +47bps; -4.5bps
- Emerging Market Equities (MXEF): -4.4%; +0.9%
- Emerging Market Debt (EMB): -4.8%; +0.3%
- Latin American Equities (MXLA): -10.3%; +1.6%
(For more, look at the Chart of the Day below)
So what exactly changed following Trump's Election Day win?
Here's the latest Wall Street thinking as recounted by Hedgeye U.S. Macro analyst Christian Drake in today's Early Look:
"Prior to the election, domestic equities had done basically nothing for two years in a successful discounting of 6 quarters of slowing growth and declining profits. Now, however, earnings growth is again positive in 3Q and now have an upside catalyst for U.S. economic growth over the next 12-24 months.
Yes, the short-term move may be overdone, but the burden of proof has shifted from the bulls to the bears and there is no overly conspicuous negative catalyst to point to. We may get some here-and-there underwhelming fundamental data over the next few months but as long as it’s generally “okay” it’ll be easy to look past it with an eye towards handicapping how the first 100 days platform progresses."
Today's upward revision to third quarter GDP is yet another arrow in the bull's quiver. The headline number was revised up 30 basis points to +3.2% quarter-over-quarter and up 10 basis points to 1.6% on a year-over-year basis. That was driven by consumption, which contributed an additional 40 basis points above the previous quarter-over-quarter estimate.
here's the trump tracker...
Click image to enlarge.
