Global Markets, Initially Shaken, Edge Higher After Trump Victory

http://www.nytimes.com/2016/11/10/business/dealbook/stock-markets-election.html

by samsolomon • 10 years ago

75 77 10 years ago

nytimes.com

tedunangst2• 10 years ago

But I was promised the crash would teach Trump voters a lesson!

sharemywin2• 10 years ago

Let's see how his trade wars versus his massive tax holidays play out.

I think the market thinks he's bluffing on the trade wars.

gdulli3• 10 years ago

He's had so many contradictory positions and has so clearly made up certain positions solely to manipulate voters that no one really knows how he'll govern.

Tycho• 10 years ago

Or that the Republicans won't support his plans for changing trade deals

eva1984• 10 years ago

Yep, if Trump talks about his prepared trade war with China, e.g. raising tariff by 45%, of cause there is going to be a crash. Looking at the market hanging on betting Trump won't do what he says is really funny.

chollida1• 10 years ago

Two points come to mind here, wrt the markets.

1) All the volatility happened in the after hours. If you just ignored the markets when they were closed, today you are pleasantly surprised, assuming you are the typical long only investor. Don't watch the markets, especially in the after hours.

Heck don't watch them on a day to day basis unless its in your job description. Life is stressful enough that you don't need to watch what your google/amazon/etc RSU's will be worth on a daily basis.

2) There is an order type called stop loss. These were useful in the 90's but haven't really had a good use since about 2005.

They allow a user to "lock in gains" or halt losses by being an order that is triggered if the markets hit a certain level. Essentially the order isn't live until its limit is crossed and then the order becomes valid.

Unfortunately if markets move alot you can get your order hit to close our your position during a momentary drop or flash crash.

Nowadays with market's more likely to have short term volatility stop loss orders aren't really an order type that anyone should use, ever.

The NYSE and Nasdaq are doing away with these orders but alot of regular investors with self directed accounts have been brought up thinking that using a stop loss order is a good idea.

it never is...ever.

http://www.marketwatch.com/story/nyse-joining-nasdaq-in-elim...

pbreit2• 10 years ago

Re #1, but that was all "real" market activity, right? Was it mainly that overseas traders were just a lot more pessimistic?

matwood4• 10 years ago

It's real, but volume is typically much much lower so it tends to exaggerate in either direction. I stopped trading futures at night because lower volumes messed up my strategies.

totalZero• 10 years ago

The only part that wasn't real was the fact that the futures hit the limit-down circuit breakers, which means the market wasn't totally free. Otherwise, yeah. That's real money. A bunch of people overreacted and sold SPX 6% lower than where it closed the next day. Potentially they were hedging derivatives, but either way, frantically selling in a sliding market is not a position you want to be in.

hammock• 10 years ago

Couldn't they be replaced with some sort of time-weighted system. Sell at 10% down only if it's been 3 hours or more...otherwise sell at 20% down. Something like that

tedunangst2• 10 years ago

But then you won't get out before the next sucker...

yueq• 10 years ago

People were watching index futures rather than A/H trading.

Also stop loss order still has lots of value instead of blindly buy-and-hold.

matt_wulfeck3• 10 years ago

Blindly buy and hold has actually been a pretty good investment strategy for the last few decades.

Besides, not watching or worrying about your stocks has benefits on your sanity as well as your wallet.

Animats• 10 years ago

DJIA 18,502.47 ▲ 169.73 (0.93%)

Last night DJIA futures dropped several hundred points, but that didn't translate to the actual stocks today.

matt_wulfeck3• 10 years ago

They started paring losses almost immediately as he was making his victory speech, which was refreshingly magnanimous.

I believe the markets wanted stability more than anything else. If he would have mentioned during his speech his desire to prosecute Hillary etc, I think that would have really affected the markets in a very bad way.

adamiscool8• 10 years ago

But to write off his rhetoric and uncertainty on the artifical stock market, phony QE-driven economy, auditing the fed, protectionism, etc. on the way to new all-time highs? Perplexing.

return02• 10 years ago

The markets proved smart. In contrast to brexit, it seems they had a better hunch than the pollsters. Also, it seems Brexit is still more uncertainty to the markets than Trump.

gph2• 10 years ago

Yea I understand that Trump is volatile and has talked about repealing Trade pacts, but he's still a billionaire republican that economically came of age in 1980s NYC. You'd think Wall Street would love him from that description.

matt_wulfeck3• 10 years ago

The Wall Street "elite" I think have mixed feelings toward him. On the one had he's against taxes and has vowed to remove some of the "worst" ones (estate tax, repatriation, etc).

On the other hand he's been protectionist and not afraid to attack trade agreements that benefit large global corporations at the expense of American workers.

VMG• 10 years ago

Betting markets did not prove themselves however. Just like with Brexit, they were in line with the polls and only reverse at the last minute: https://i.imgur.com/tEDdMpT.png (from https://electionbettingodds.com/WIN_chart_maxim_lott_john_st...)

return02• 10 years ago

I'm happy to report i bet early on trump and reaped the rewards!

pacofvf• 10 years ago

Yes even the Peso has already recovered from its after hours low, that means that the market already had priced in the "Trump risk", it just erased any gains propelled by the Clinton optimism of the past few days, right now is trading better that its all time low from a couple of weeks ago.

ddoran• 10 years ago

It's not all positive. Gun makers Smith Wesson [SWHC, -16.13%] and Sturm Ruger [RGR, -14.44%] down massively on the day as Trump supporters won't be rushing out to take arms against a Democrat government they refuse to recognize.

mikeyouse• 10 years ago

On the plus side, CCA (private prison company) is up 50% today.

komali22• 10 years ago

Yay.

gdulli3• 10 years ago

It's more likely due to this: http://www.motherjones.com/politics/2016/11/gun-ballot-initi...

h4nkoslo• 10 years ago

Gun control is great for gun sales - California for instance is seeing an unprecedented boom in the run-up to their legislation kicking in on Jan 1.

The lack of gun control legislation prospectively coming from a President Trump, as opposed to HRC's platform of re-enacting the assault weapons ban etc., is driving those stocks lower.

rdtsc• 10 years ago

Was watching NBC news last night (for entertainment, I added them to the "fun stations" list along with "Fox"). And it was funny how they were baffled and backpedaling hard on why Trump won, and they never expected it.

However, one thing that seemed to make them happy was the stock markets. "Oh look, stocks are crashing worldwide" and they kept belaboring that point, as a validation in a way "see we warned you how bad Trump was" kind of sentiment.

For example US Steel (X) jumped a whopping 20% since yesterday. Something tells me they probably won't be focusing on that.

One wonders, does anyone there look around and say "What have we become? Are we just clowns here making stuff up? What if we actually tried to tell the truth, maybe just turn the spin level from 9 to a 3 and see what happens... as an experiment"

danso• 10 years ago

What's sad is we just experienced that with Brexit http://www.cnbc.com/2016/08/23/brexit-two-months-on-markets-...

toddkazakov• 10 years ago

I personally don't think the events can be compared. Brexit has a lot of (unknown) implications for the UK, due to the fact that it's not clear what deal they'll get from the EU. On the other had Trump being elected president is just a change of the president of the US. There's no immediate threat.

semi-extrinsic• 10 years ago

One wonders, does anyone there look around and say "What have we become? Are we just clowns here making stuff up?"

Well, if it didn't become apparent when Russell Brand absolutely destroyed "Morning Joe" back in 2013, there's no saving them.

https://youtu.be/mDCtFTyw6fI

npunt• 10 years ago

Magnificent, he was playing at a whole other level. I can see the twisted parallel.

arprocter• 10 years ago

Which is probably what led to The Trews

https://en.wikipedia.org/wiki/The_Trews_(web_series)

SkyMarshal• 10 years ago

One wonders, does anyone there look around and say "What have we become? Are we just clowns here making stuff up? What if we actually tried to tell the truth, maybe just turn the spin level from 9 to a 3 and see what happens... as an experiment"

XKCD's "Sports" comic also applies to the media:

https://xkcd.com/904/

alecco2• 10 years ago

Not the same. The narrative they push suits them.

sixQuarks• 10 years ago

I was also amused watching NBC (and CNN) last night. They were so desperate to keep the hope alive, constantly saying "It's not over yet! It's not over yet, too close to call", when it was obvious it was already over.

pgodzin• 10 years ago

Don't think it was so much desperate as you don't want to make an early call on the presidency without being sure. They acknowledged that they didn't really see a path, but wanted to get specific info in (like absentee ballot numbers) first before making the official call. Some states still haven't been calling half a day later.

__derek__• 10 years ago

I'm not sure when you were watching. Chuck Todd started saying that there was only the slimmest of hopes for a Clinton victory before 8 pm PST.

CoolGuySteve• 10 years ago

Bad polling data is a more likely culprit for the confusion. There's some cognitive dissonance involved when the months of poll numbers and projections turn out to be completely wrong.

Between the Brexit, the Canadian Liberal party sweep, and this election, there is some methodology error in modern polling in the English speaking world that needs to be figured out.

matwood4• 10 years ago

I think people have simply started lying to polls because any opinion you may hold will get you labeled the boogie man word of the day.

matwood4• 10 years ago

CNN was hilarious. King and Blizter kept looking at one county in WI, saying 'just wait'. You could tell they were not really mad as obvious HRC supporters, but just completely shell shocked on what they witnessed. By the end, they kept going back to that county looking for magical votes to appear I guess.

Meanwhile, the NYT website had Trump as the >95% winner a couple hours prior.

strictnein2• 10 years ago

How King didn't tell Blitzer to shut up is beyond me. King would be trying to drill down to something interesting, and Blitzer would jump in with "Show me Alabama!".

mstade2• 10 years ago

The NYT site seemed to hone in on results pretty quickly and accurate overall. Pretty impressive work!

mlinksva• 10 years ago

Earlier indicator that traders expect higher volatility under Trump https://www.brookings.edu/wp-content/uploads/2016/10/what-do...

snikeris• 10 years ago

No discussion about what's going on with treasuries today?

notirk• 10 years ago

Could you expand for those not in the know?

shoover2• 10 years ago

There was a relatively large upward movement in yields today (and corresponding downward movement in price).

I bought a few with cash on hand in the retirement and college savings accounts.

From Google Finance:

  Bonds [yields]
  3 Month	0.42%	+0.02 (5.00%)
  6 Month	0.53%	+0.03 (6.00%)
  2 Year	0.90%	+0.07 (8.43%)
  5 Year	1.48%	+0.12 (8.82%)
  10 Year	2.07%	+0.12 (6.15%)
  30 Year	2.86%	+0.10 (3.62%)

alecco2• 10 years ago

There is a selloff so the price is lower. Bonds pay an interest (in coupons). There is the face value (par). But you don't buy/sell bonds at face value, you buy them at market value. So what's interesting is the yield = coupon amount / market price (or just price).

Relative to other bonds US treasuries are a lot less attractive today.

http://www.investopedia.com/university/bonds/bonds3.asp

http://data.cnbc.com/quotes/US10Y

But the price is not that simple. Since bonds are paid periodically, the market price factors in the next coupon. Would you buy a bond at the same price 1 day before paying coupon than the day after? Of course not! So market price is called "dirty" because it has the next coupon implicitly considered. There are different ways to make it a "clean" price, depends on the country.

bjourne• 10 years ago

It's so silly that people still assign intent to stock market movements. Stocks go up when gamblers/speculators/investors think they will go up and down when they think they will go down. Didn't we learn anything from fucking yesterday when the markets indicated a clear victory for Clinton?

readhn• 10 years ago

The guy is a speculator first of all so the market understands him very well and he understands the market. He is not going to do anything stupid as he knows there will be immediate negative consequences. He is actually in a hard position now to deliver middle class America it's jobs without generating some short term pain first. Yeah block China and watch that toilet paper cost climb 2-3x and see how adorable things are now middle America. Yes kick out illegal workers and watch those tomatoes go for 10$ per pound. Its all bs fellas and it's bad for You.

Global Markets, Initially Shaken, Edge Higher After Trump Victory

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