Monday, November 7, 2016

No matter who wins - the bond market is the long-term loser.

As seen on (Bloomberg) — Once the dust from election campaign settles stateside, the emphasis in Europe will shift very much back onto Europe, and its own substantial problems
S&P 500 Index has fallen for nine straight sessions
Trump 
The practicality at the moment is that the markets are over-hedged on a victory of Trump and the S&P 500 Index has fallen again - for nine straight sessions, and (according to Bank of America ) cash holdings of fund managers are at a 15-year high

Clinton
If a Hillary Clinton wins it initially means a stock relief rally and a firmer dollar — but the flipside of that, with a 76 percent likelihood baked in, is that the Federal Reserve hikes in December.

Were this to actually happen, a less-nervous Fed will be able to lift its sights to the future instead of near-term risks, and that means higher yields and a steeper curve. 

2016 Election: Clinton vs. Trump


No matter who wins - the bond market’s the long-term loser. Both candidates are promising big spending, and that spells big borrowing — regardless of what either do on taxes.


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