Wall Street rallies on U.S. elections; tech, health stocks lead

Just about everybody found some justification for declaring victory in the midterms so investors on both sides of the aisle enthusiastically pushed the Dow up 545 points with almost no arguments.  The curve was quite unusual today – straight up!  The wisdom now – and history does back this up – is that a divided Congress may actually prove better for business now that checks and balances are back in place and everyone will be forced to negotiate.  And there were things to like for both sides – voters approving Medicaid expansion was a boost for health insurers and a rejection of tougher rules for oil and gas boosted energy.  Volume was again very robust at 8 billion but a little below the elevated averages that have been dominating the market in the past few frenetic weeks.  There has been a sigh of relief that the election is over – the VIX went down to its lowest in a month. 

Wall Street gains as investors look to U.S. elections

Election Day and it appears that both sides feel optimistic that things are going to go their way as investors on both sides of the aisle went on a buying spree pushing the Dow up another 173 points.  So, as I mentioned yesterday, tomorrow will be the real test.  But at least today everyone was seeing green, already pricing in the likelihood that the Dems will take the House and the Reps will keep the Senate.  But volume was relatively muted at 6.8 billion so trading was light pending tomorrow’s news. 

Wall Street boosted by financials, energy, defensive sectors

Today’s rally (all day in the black and straight up) brought the Dow back up 190 so yesterday’s losses were recouped on a scale of nearly 2:1.  On the eve of election, investors retreated to the safer stocks like real estate, utilities and consumer staples.  And though volume was still quite healthy at 7 billion, it was lower than the recent elevated averages which points to caution before the election.  Apple was once again the biggest drag having its biggest two-day loss in nearly six years.  Caution is also advised ahead of the Fed meeting later this week.  But Wednesday’s going to be the really big day. On Wednesday, we’ll know how the vote went. 

Succinct Summation of Week’s Events 11.2.18 (plus Trump the Revealer)

The usual weekly summation is below, the positives being payrolls and hourly earnings up with the inevitable flip side being that p+e = likely continued rate hikes.  With what is likely the most important election in many years coming up on Tuesday, this Sunday's bonus is today's very good non-partisan analysis of Trump courtesy of Barry Ritholtz.  As noted, he did the same thing with both Bush and Obama so now it's Trump's turn but he does so with surprising objectivity and perspective.  It's an ideal commentary for election week. And anyone who dares not vote because of the rain that's due on Tuesday will deserve what they get.  Historically voters do tend to stay home when there is inclement weather but I have a feeling that Tuesday will make history for both the weather and other things. 

Never Send a Hawk to do a Dove’s Job

After an October that was basically ripe enough for the record books, for this first weekend in October I submit still another perspective on the Fed and interest rates courtesy of our guru Barry Ritholtz of The Big Picture blog, this one reprinted on Friday's blog and originally published on Bloomberg October 26th.  It's a short read and quite informative.  Enjoy this rare dry weekend we're having. 

Wall Street snaps three-day rally as Apple falls, trade optimism fades

It was mentioned in yesterday’s post that Apple turned in a disappointing Q3 report after the market closed so there might be a dip today.  That is just what happened with the Dow initially up some 60 points but then diving 500 by 2 pm and then recovering to a 109 point deficit by close.  As you might guess, this was attributed almost exclusively to Apple’s report that sales were expected to drop in Q4.  The FAANG giant tumbled 6.6 percent bringing the company down below its landmark $1 trillion dollar value.  Also contributing to the day’s malaise was Larry Kudlow throwing cold water on the hopes of making a deal with China, citing that Trump had not yet even asked his advisers for a plan for a proposed trade deal.  Other data was very positive with job growth up sharply in October, Chevron and Starbucks turning in great Q3 reports, and 78 percent of S&P Q3 reporting beating estimates.  As has been the case lately, volume was very high at 8.9 billion. 

Wall Street climbs for third day, trade optimism helps

Now for a third consecutive session we’ve had triple-digit gains, today even a little bit better than yesterday with the Dow climbing another 264.  A few days ago, we had a very serious rout when the White House put out the statement that we might be having trouble with China.  Today the statement was that things with China were “moving along nicely” and that’s all it took to start another furious round of buying.  Q3 still solidly in command helped too with 77 percent of 348 of the S&P companies beating estimates.  After taking a substantial beating, the Nasdaq has had a 5.4 percent lift in the last three sessions, its biggest 3-day gain in 2-1/2 years, but not to be too rosy about things since the S&P has had its worst month in seven years.  (In other news Apple is reported to have turned in a bad Q3 after today’s closing bell, so we might see a dip tomorrow.)  Volume remains very high at 9.1 billion.