Good morning. Happy Wednesday. Happy Day-After-Election-Day.
The Asian/Pacific markets posted stiff, across-the-board losses. Japan dropped more than 5%; New Zealand fell more than 3%; Hong Kong, Taiwan and South Korea fell more than 2%. There were no winners. Europe is currently mostly down. Switzerland and Russia are up more than 1%. Spain, Italy and Portugal are down more than 1%; the Netherlands, Greece, Germany, France, Turkey and Romania are also weak. S&P futures in the States, which were down more than 100 overnight, are down about 30 as of this writing.
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The dollar is flat. Oil is flat; copper is up. Gold and silver are up. Bonds are down.
To the surprise of many Donald Trump will be the 45th president of the United States. The pollsters got it wrong. The media got it wrong. Everyone got it wrong. Even the GOP is surprised by how well Trump did.
As he was gaining momentum last night, futures tanked. At their worst level, the S&P was down over 100, triggering the circuit breakers, but now they’re only down about 30.
The Mexican Peso fell as much as 13% overnight – its biggest single-day drop ever.
Trump has been very critical of the Fed and low rates. Will he replace Yellen with a much more hawkish Fed chairman? The odds of a December rate hike dropped from near 80% to 50% in the last 12 hours. Financials are struggling this morning, including Goldman Sachs, which is down more than 8%.
Trump has also been very critical of Obamacare, which has gotten a lot of negative headlines recently for big price increases. Trump will attempt to trash the entire system. Health care stocks are doing well in premarket action.
Will the ECB sense instability in the market and economy and commit to further stimulus? We’ll see.
I stated yesterday the reaction to the election results could linger for a couple days…it wasn’t necessarily going to be a “gap and then focus attention elsewhere” situation. I still think this. S&P futures dropped 100 and then rallied back 70. We could get some similar moves the next couple days. Risk is still very high. I’d say use stops, but we could get some wide swings in both directions that take out stops and leave you with losses even if the market doesn’t change much.
Historically the market has rallied the last two months of an election year. Look at the Brexit move – huge back-to-back down moves followed by an equally impressive rally. Even if the market looks terrible today, be careful. It doesn’t have to fall apart. Expect the unexpected.
Enough rambling. See you on the Message Board. More after the open.
Stock headlines from barchart.com…
U.S. auto supplier stocks were all downgraded to ‘Underperform’ by Bank of America/Merrill Lynch, citing risks to trade, and NAFTA in particular, following the Trump win.
Constellation Brands (STZ +0.37%) slipped nearly 3% in pre-maket trading after the stock was downgraded to ‘Underperform’ at Bank of America/Merrill Lynch.
U.S. Steel (X +1.60%) was upgraded to ‘Buy’ from ‘Hold’ at Jeffries with a price target of $26.
Restaurant Brands International (QSR +0.72%) was rated a new ‘Buy’ at Veritas with a price target of $52.
TripAdvisor (TRIP -0.52%) slid over 12% in after-hours trading after it reported Q3 revenue of $421 million, below consensus of $436.6 million.
Hertz Global Holdings (HTZ -22.50%) gained nearly 1% in after-hours trading after Carl Icahn bought 15.1 million shares of the stock Tuesday and boosted his stake in the company to 33.77% from 15.6%.
Jazz Pharmaceuticals PLC (JAZZ -1.23%) fell over 3% in after-hours trading after it reported Q3 adjusted EPS of $2.57, below consensus of $2.61.
ViaSat (VSAT +0.63%) rose nearly 3% in after-hours trading after it reported Q2 adjusted EPS of 40 cents, higher than consensus of 34 cents.
Globus Medical (GMED -1.02%) slumped 10% in after-hours trading after it lowered guidance on 2016 sales to $560 million from a July 26 view of $575 million, and cut its 2017 sales view to $625 million from a prior view of $640 million.
Multi Packaging Solutions International Ltd. (MPSX -1.31%) dropped 8% in after-hours trading after it reported Q1 adjusted EPS of 17 cents, weaker than consensus of 24 cents and said it sees a “challenging” first half of 2017.
Points International Ltd. (PCOM +1.59%) was rated a new ‘Buy’ at B. Riley with a 12-month target price of $10.
SAExploration (SAEX -3.82%) surged over 20% in after-hours trading after it announced a new project award for seismic data acquisition services valued at $35 million for a 3D deep water ocean-bottom marine project in West Africa.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
1:00 PM Results of $23B, 10-Year Note Auction
9:00 PM Fed’s Williams: Economic Outlook
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers
7 thoughts on “Before the Open (Nov 9)”
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the ride down was great,i closed everything incl japan n225 after they they came back for time out
trump can do a lot just by executive order and i hope his first step is to bankrupt everyone and clean out the corruption bad debt
the world debt ponsi needs to be exploded with bond haircuts
thank god we have got someone that will look after the economy not wall streat
the fed does not raise rates its the bond market that does
trump knows a lot about bankruptcy and i hope he brings it back into fashion
People who are begging change from Trump are dreaming. One cannot be the most prominent real estate developer in a country without being part of the establishment in that country. Trump embodies America, in good ways as well as bad. One change Trump can try to bring about is to shift America’s axis from the Atlantic to the Pacific. He may or may not know it at this point. But I see it as a possibility when I look at the backers and opponents of him across the political and establishment spectrum. If he even tries such a shift, let alone succeed, the repercussions would be tectonic round the globe.
exactly -the pain to sanity wont be easy
usa first will put a strain on all–he will cross the ile to burnie sanders to get what he wants if not from his own party–he will be unconventional
japan/europe will be the loosers /china under presure
russia /saudis wont like usa shale oil for sale
there are many reprecussions
it will take maybe 8 years of bear markets to acheive–thats what the charts say
become a bear and have fun
why is wall street so happy today…i guess they believe he will work with them
i totally and respectfully disagree. he will not be unconventional at all. he is the establishment to his core. presidents don’t have much power anyway in the united states. i don’t agree with your russia/china analysis either. there is more to say but let’s leave it at that and agree to disagree.
Be a buyer and wait, there is no sign that you can not subsist on SPY,QQQ and MORAL until things Take some form
we are currently in the final leg up of this euforia ,probably to new highs for the instos to get set
then reality sets in
trump is a whealer /dealer /developer and thus knows how to bribe councils–he will get things done
he will by pass the current” establishment” and way of thinking
prosperity and sanity will come with a lot of pain world wide but like regan after about 4 years we will see light at the end of the long tunnel
stay away from bonds/high yeild corporate debt–the debt cycle implosion will hurt