FBI director James Comey played the bureaucratic card again when he released yet another pre-election report on the Clinton files. Comey issued an all-clear on any sort of criminal prosecution involving the newest Clinton file leaks. It’s interesting that the FBI director issued the letter three hours before the opening of the U.S. electronic exchanges, but as expected, the global equity experienced a relief rally in anticipation of a Hillary Clinton victory.
David Tepper was on CNBC this morning putting forth an investment view in line with yesterday’s Notes From Underground. Tepper was voting for the known “steady hand” of Hillary versus the uncertainty of Donald Trump and his teleprompter reminding him to stay on point. Tepper cited personal differences with Trump’s character but Tepper was also promoting his voting for Republican candidates further down the ballot. In Tepper’s world, and for most of the financial community, a house divided against itself is the best outcome.
***This is a major alert to all traders: Don’t RACE THE ALGO HEADLINE READERS. If you learned anything from the Brexit vote it should have been this: The algos are to be programmed to react to key counties and states so as to ascertain a Clinton or Trump victory based on certain key voting regions. Do your homework and know the importance of Virginia, North Carolina, Ohio and Florida. Pay attention to Maine’s second Congressional district to see who wins that for Maine is not a winner-take-all affair. The Rust Belt states of Michigan and Wisconsin are in play so do your homework so as to be able to know why the algos are moving the markets. The U.S. election is for more pivotal for the globe than Brexit so it will take longer for the election results to be dissected and understood unless the Democrats sweep the Presidency, Senate and House of Representatives.
The equity markets had a 2%+ rally today so a Hillary victory has already created a relief rally from the sustained drop from the initial Comey effort. An initial equity rally for a Hillary victory will be met with a selloff if the Democrats sweep. For further views please see the Tepper interview, which was also embraced by Mohammed El-Erian. Be prepared but because cautious as you will not outrun the algos. Preparation will result in an ability to use the pricing chaos from the headline readers for your advantage. TRADE LOCATION WILL BE CRITICAL. SPEED WILL NOT BE REWARDED.