Notes on market and election outcome!
By Gary Kaltbaum – November 10,2016
We wanted to just talk markets this morning but something we have already seen just the day after the election has us wanting to talk outcome of election also. So…
What happened to the crash? What happened to the 900 point futures drop? The scare tactics did not work just like it did not work with Brexit. Outcome…massive one way, one day trade in defense, industrials, insurance, financials, rails, biotech, drugs, steel, metals/mining and other economically sensitive areas. All these areas are perceived to be the beneficiaries of a lower tax, less regulation environment that looks to be coming out of a Trump administration…and quickly. We found dozens of high volume breakouts in these areas. THE QUESTION: Will they be one day wonder moves? Quite often, news events like this are just that. Our tactics…let them prove themselves. Taking off the fundamental hat…TECHNICALLY, they are simply big base breakouts on volume. We continue with the momentum this morning.
Why?
Biotechs/drugs soar as Trump and a Republican Congress essentially take all the drug price scrutiny off of the sector.
Defense stocks soar on Trump’s words on a stronger defense industry and wanting to grow the military again.
Sodas down on soda tax in several places.
Gun stocks down…worry about confiscation off table.
Steel stocks very strong…as a Trump presidency will stick middle finger at China and other steel cheaters.
Financials strong…Dodd/Frank may be headed the way of the dodo bird. No worry about Elizabeth Warren becoming Treasury Secretary!
Caterpillar, Fluor, Vulcan Materials, Martin Marietta Materials and others on potential for construction/infrastructure.
Time Warner down but not much as Trump was against merger but think as President, he backs away from that rhetoric.
Interest rate sensitive utilities, real estate and housing hit hard as long bond yields continue higher as bet against the fed’s easy money as well as potential for a stronger economy is now on. Bond yields are skyrocketing.
We will have a bigger report on the election this weekend but we think most pundits are getting it wrong. The big winners of the election was not the right, was not Trump, was not democracy…it is the radical left and the national media. They did not even wait a day. They did not even take a cue from the three principals involved. After all, Trump, Clinton and Obama came out with all three acting perfectly. Their speeches were uplifting…speeches from Clinton and Obama, who understandably are not happy campers today, were fantastic. But that did not matter. The radical left need fall guys in power. They now have their fall guys.
A certain news network let one of their commentators, an avowed Communist gin up racism again, calling the election “Whitelash!.” It was not the will of the people. It was racism that had Donald Trump win the election. It was not the direction of the country that had Donald Trump win the election. It was racism. A certain news network is already pushing and celebrated the thuggish radical left who are already complaining about an administration who has yet to take office. Other mainstream media were not as bad but not much different. When Obama won, he was celebrated by the media like we have never seen. This president elect has already been demeaned by the media like we have never seen…and he has yet to take a step into the White House.
For the past eight years, there was no poverty, no homelessness, no inner city crime. Nah…everything was just fine! It will now be front and center again as the fall guys are now in power…and it will all be because of them. It is our opinion that the Obama administration did very little to help the homeless, poverty, inner cities, minorities and the like. Lots of talk…no action. But there was no mass protesting of Obama…no complaining of Obama. That has now all changed. Mark these words down. What you saw last night from the radical left as well as the media, unfortunately, is just the beginning. We have seen this before in the past but going forward, it will be on a scale we have never seen. Social media was not around in the past. It will now be a big part of the issue going forward. We hope we are wrong but all evidence in just the next day after says otherwise.
Gary – stick to the markets and take the FOX news hat off. You’re good on markets, so stay on target with what you’re good at.