Veterans Day …and my birthday!

Given that way back when I served in the 101st Airborne, it’s a double holiday for me.

…a post nevertheless.


Yesterday was Day 2 of the President-to-be Trump era.

S&P 500 gains were more modest than on Day 1, but the general pattern of trading was similar.  Action continued to be “conceptual” in nature, that is, industries that Wall Street thinks will benefit from an end to Congressional gridlock generally did wellIndustrials and Basic Materials, for example.  Both parties have long favored amped-up infrastructure spending, but Republicans had previously blocked any initiatives.  We won’t know what Democrats would do were positions reversed, but with Republicans in control of both houses any attempt to ape their past anti-Obama behavior will prove ineffective.

Financials continued to outperform strongly, both on the idea that finally getting fiscal stimulus will free the Fed to alter its super-low interest rate stance.  The market also seems to believe that some restrictive provisions of Dodd-Frank will be removed come 2017.  Whether this is good or bad remains to be seen (for what it’s worth, seeing that no one has gone to jail and the same clowns who caused the financial crisis are still in charge, my vote is “bad”).  If some shackles come off, however, bank profits for a while will be higher than previously thought.  (Note:  despite my just-expressed distain, I own JPMorgan Chase.  I guess I’m a Wall Streeter at heart.)

Healthcare was up as well, on the idea that the industry will have greater pricing power under Republicans.  Healthcare firms also generally pay corporate tax at the highest rates–the reason inversions have been so prominent in this sector.  Tax reform would presumably benefit these companies more than others.

Yesterday also saw sharp losers.  Telecom, Utilities and Staples were all down by over -2%.  IT came close to that mark, at -1.8%.  IT seemed to me to suffer from serious derivative-led selling.  Don’t ask me why.  The only sense I can see in the rest is that the US$ has begun to rise, potentially lowering the profits from Staples.  The idea that rates will be rising for sure, and faster than under a Hillary administration, is behind the weakness in bonds, Utilities and possibly Telecom as well.

Energy took the day off.


A closing thought:  if we were to roll back the clock by a week, liberals could have imagined that when Hillary won, disgruntled Trump supporters might organize anti-Clinton demonstrations in right-wing hotbeds.  These protests would have been labelled as typically Trumpish, and disgraceful.

As regular readers will know, I’m not a fan of Trump.  It seems to me, however, that the most effective way to influence Mr. Trump is to boycott the products bear his family name, not to cast doubt on peaceful transition of power to the election winner.


4 responses

  1. Happy Birthday and I totally agree with your take on the Trump protesters. The election is over and we need to move on and plan for 2020.

  2. Happy birthday, and many thanks for continuing to write!

    I am going to make a WAG the that you don’t like REIT, but I am intrigued by the Vornado-JGB merger.

    Vornado owns most of Crystal City, right by National Airport. Huge vacancies as a result of BRAC moves.

    JGB is the largest developer in DC. Projects all around town.

    $500 billion in infrastructure is just what the DC CRE market needs.

  3. Been reading your posts after a friend turned me to them. Always insightful. Much appreciated.

    Also, Happy Vets Day! Your service made ours possible. I was Navy, but looks like we have jump school as a connection.

    My best, Mike


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