Yesterday’s late spurt in the market suggested Wall Street saw the outcome of the midterms and was comfortable with a split government, which has zero chance of derailing the Trump agenda and has incentives to move the needle on certain issues.
I continue to point to Material names as a sign of an increased probability some kind of infrastructure deal can happen. The sector was the best performer yesterday and has outpaced others in the past five days.
S&P 500 Index
Communication Services (XLC)
Consumer Discretionary (XLY)
Consumer Staples (XLP)
Health Care (XLV)
Real Estate (XLRE)
Now that the midterms are over, we can shift the focus back to the Federal Reserve, which begins its two-day meeting today. Everyone expects it will not result in a rate hike but offers a chance for clarity on what a “neutral” rate looks like.
That’s hoping, of course, the Fed has an idea about neutral, which seems to be a moving target depending on which official is speaking on any given day.
Election Post Mortem
A lot of tax legislation went down in flames while most marijuana initiatives passed. Although some of the more vocal tax-hiking candidates lost, the margins of defeat are enough to remind corporate America to do more to blunt anti-capitalism sentiment. A recent piece in FT used Sears as a cautionary tale against capitalism.
From 2005 to 2012
- Stock Repurchases $6,000,000,000
- Operating Cash $1,500,000,000
- Stock high $144
- Stock low $31
- Stock Now $0.39
2005 - 2012
I’m not sure if big business will get this message, but last night, the strong economy didn’t factor in as much as it should have. Many people feel their own personal fortunes aren’t matching those of big business and the stock market.
China Trade Battle
This was my first tweet this morning, and an hour and a half later, President Trump weighed in as well. The financial media, which is loath to say anything positive about this administration, won’t admit it, but the wins and margins of victories help Trump in his efforts for a fair-trade arrangement with China.
Charles V Payne
?So this morning president Xi of China and Trump haters wondering why soybean tariffs backfired. Yielding biggest Senate victories for GOP.
Donald J. Trump
?Received so many Congratulations from so many on our Big Victory last night, including from foreign nations (friends) that were waiting me out, and hoping, on Trade Deals. Now we can all get back to work and get things done!