Later, 2:13 p.m. Central Time: the craziness continues. Over at Yahoo!Finance, this headline: "US stocks claw back losses after Trump shock." Unless you were trading in the futures market at 3 o'clock in the morning, you suffered no losses. The market opened up, and is now almost 300 points int he green. Anyone suffering losses today after yesterday is a poster child for bad market timing.
Later, 2:06 p.m. Central Time: the market is now up almost 300 points. This has nothing to do with Trump policies. The reason the market is up almost 300 points because:
- the fear factor is gone; no threat of a constitutional crisis; the transition looks like it will go well;
- the market had been down the last couple of week (folks may remember the headline, "longest losing streak since ..."; and,
- once the market goes past 100 points in either direction, the 'bots take over, following algorithms.
The election returns on Tuesday sent stock futures into a dive and drew expressions of consternation from abroad.Accurate but not complete. An act of omission.
Yes, the article was written before the market opened and before congratulatory tweets had poured in from around the world, but this is the age of electronic immediacy. It would take almost no effort to update the article. Drudge is well-known to refresh rarely, but he can re-fresh immediately and spot-on when it's that important. There's a reason Drudge is successful and The New York Times reported a 98% drop in profits in 3Q16 earnings results.
That "dive in stock market futures"? That's all some people will read; they won't check the market for themselves.
The opening was green. There was a short period of red (about 20 minutes in red) and then back up about 40 points for most of the morning.
Now, in mid-day trading, this is quite amazing:
If the print is too small to read, the Dow 30 is up almost 200 points.
If this holds, it will be interesting to see what MSNBC and CNBC have to say about this tomorrow in their analysis. It will be interesting to see what Jim Cramer has to say about this later today.
The volatility confirms what every trader knows about the market. The market is all about greed and fear. And the worst fear is uncertainty.
When the results started coming in overnight, it was unclear how this was going to play out. It certainly did not look like it was going to play out as scripted. Uncertainty was at its height.
James Carville noted the 700-point plunge and (infamously) said it would continue (implying, it seemed, that it would get worse).
There was talk of a constitutional crisis going into this election. Don Trump was on record saying he might not accept the results of the election. We all know the ferocity with which the Clinton dynasty can bring down on state secretaries of state if the vote is too close to call. Lawyers for both sides were pre-positioned in battleground states. The "market" in short, at midnight, was looking into Dormammu's throat of uncertainty. No wonder the market was in freefall.
Now that the results are accepted by all; now that President Obama has invited President-elect Trump into the White House tomorrow; now that Hillary and other national leaders have given statesmenly and stateswomenly speeches congratulating the President-elect; now that foreign leaders -- including Mexico's president and the Philippines president -- have called in their congratulatory phone calls, telegrams, and tweets; the "market" is comfortable again.
The "market" can get back to fear and greed. Wherever the market settles today it won't be because of Donald Trump's campaign speeches.
By the way, speaking of foreign leaders, for the record, Egyptian president Abdel Fattah el-Sisi was the first foreign leader to reach Trump to congratulate him. El-Sisi needs all the help he can get.
This really is a cool photograph isn't it? It beats a photograph of Bill, Hillary, and Chelsea, doesn't it?