Markets lean toward “Trump trades” as election results start to trickle in
(Reuters) -Republican Donald Trump won Indiana, West Virginia and Kentucky in Tuesday’s presidential election while Democrat Kamala Harris captured Vermont, Edison Research projected, as polls closed in the first six U.S. states including the critical state of Georgia.
Georgia is among seven battleground states likely to decide the winner of the contest, with opinion polls showing the rivals neck and neck in all seven – Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin – going into Election Day.
MARKET REACTION
* S&P 500 e-mini futures rose 0.44% as early results came in
* The yield on the 10-year U.S. Treasury note rose to 4.335%
* The U.S. dollar index was up 0.73%
* Bitcoinwas up 2.9% at $71,164
COMMENTS:
JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP
“The early indications are Republicans are outperforming in areas where they haven’t traditionally, in places like Miami Dade. I would imagine that at this particular moment, the Harris camp is worried. The markets are reflecting that we might know the answer sooner, rather than have to wait multiple days to have the answer to the election. That’s what markets have been most worried about, that there would be a long, drawn-out fight over who won. Being able to get a decisive winner, whoever it is, is going to be good for market and that’s what’s reflected, both in today’s performance and also the futures right now.”
ALEX MORRIS, PRESIDENT & CIO OF F/M INVESTMENTS, WASHINGTON, DC
“The market was well prepared for this uncertainty. Stock futures are pretty much muted right now, but everyone’s trying to take the few inches of data we’ve got right now and turn it into a mile. But while there are a lot of traders trying to get ahead of this thing, I don’t think we’ll see a real increase in activity for another hour or two, when we get to the Midwestern states, we get more data from North Carolina and some insight into Pennsylvania. There will be a lot of us up until 2 a.m. or 3 a.m. trying to figure out what is happening and what positions we may need to adjust.”
JAMES KNIVETON, SENIOR CORPORATE FX DEALER, CONVERA, MELBOURNE
“The market seems to be reacting to the strong showing by Trump so far in Georgia but until results start rolling in from the more urban suburbs it remains too close to call.”
“It is too early to call any of these races and to make any real projections on the results so far but the US dollar has regained a lot of ground lost recently, the market is clearly settling in for a long night”
“Risk currencies such as the AUD that appreciated ahead of a tightening race are having a pullback as Trump racks up some early wins. US Treasury yields are advancing as well reacting to the same sentiment.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN
“As the early results come in, even though none of them are that surprising, we are seeing Treasury yields rising a little bit, the dollar strengthening, bitcoin up; kind of a classic Trump trade. Treasury yields because of a market belief that Trump might be worse for deficit, the dollar’s move because of expectations of new tariffs, and bitcoin, well, Trump is a crypto ‘bro’. There’s not a lot of conviction in these moves; it seems like these are little pops. If conviction is high these trends move faster and farther, but this doesn’t have that snowballing feel to it. It’s still early days in terms of results.”
ADAM TURNQUIST, CHIEF TECHNICAL STRATEGIST, LPL FINANCIAL, CHARLOTTE, NC
“If anything, to read through (results out so far) it is maybe more toward Trump than anything, so futures and yields are moving higher . But it’s so early to see any kind of momentum”
“I traded the 2016 election, but I am not doing it this time. I made a little bit of money, but it was a long way from my high water mark with a lot of volatility.”
