Looks like the Democrats will take both Senate seats in Georgia. Looks like the presidential election results will be certified by the end of the day. There will be no white hats coming to the rescue. The country is lost. Welcome to the jungle.
Bond yields, bitcoin and small cap stocks surged while tech stocks and the dollar tumbled on Wednesday on the prospect of more stimulus and tougher tech regulation if Democrats take control of the U.S. Senate following a run-off election in Georgia. Stocks in Europe rose and those in Asia were mixed as traders digested what’s next for global politics. Despite all the turmoil, S&P futures were surprisingly flat, trading down just -0.2% at last check.
The real action however was below the surface with Nasdaq futures sinking 1.5% with Apple, Microsoft, Intel and Cisco all falling up to 2% or more in U.S. pre-market trading as investors priced in the prospect of a Democrat-controlled Senate that could lead to tighter regulations on technology mega-caps…
… however, with a flood of new reflationary stimulus on deck, small caps soared with Russell futures hitting a new all time high.
”The market is pulling in implications of what a Democrat win would mean for the economic recovery,” said Peter Rosenstreich, head of market strategy at Swissquote Bank. “Expected increase in fiscal stimulus and infrastructure spending would bode well for cyclical or growth stocks. Tech stocks may not benefit as much, and that may have something to do with their stretched valuations.”
Bets on more stimulus pushed 10Y Treasury yields above 1% for the first time since March as investors rotated out of technology and into cyclical stocks. German bond yields followed Treasuries to hit their highest in almost five weeks.
“The market is pretty much responding as you would expect in terms of the probable Democrat victory, the 10-year being the biggest standout,” said Derek Halpenny, MUFG’s head of research for EMEA global markets, pointing to the inflationary impact of more stimulus.
In Treasuries, if lawmakers approved additional stimulus spending, it would mean more bond issuance and higher yields on longer-maturity Treasuries. Traders now see U.S. inflation averaging just over 2% per year over the coming decade, the highest level since 2018. But for the stock market, there’s a risk that a unified, Democrat-controlled Congress would portend higher corporate taxes and more regulation. Technology companies dominate U.S. benchmarks, giving the industry an outsized importance.
“What looks like good news for the U.S. economy is probably bad news for the relative performance of U.S. stocks,” said Paul O’Connor, head of multi-asset at Janus Henderson Investors.
* * *
For those who missed last night’s action, Raphael Warnock, a Baptist preacher from the church of Martin Luther King Jr., beat Republican incumbent Kelly Loeffler to become the first Black senator in the history of the deep South state. Jon Ossoff, a documentary filmmaker who at 33 would become the Senate’s youngest member, held a narrow lead over incumbent David Perdue in the other race, with a final outcome not expected until later on Wednesday at the earliest. At last check, the two were locked in a dead heat with some absentee votes yet to be counted and as many as 17,000 military and overseas ballots due by Friday.
Along with a narrow majority for Democrats in the House of Representatives, a “blue sweep” of Congress could usher in larger fiscal stimulus and pave the way for President-elect Joe Biden to push through greater corporate regulation and much higher taxes.
Analysts generally assume a Democrat-controlled Senate would unleash a debt tsunami and thus be positive for economic growth at least in the short term, while boosting reflationary assets, and negative for duration assets such as bonds as well as the dollar as the U.S. budget and trade deficits will explode.
“A Democrat clean-sweep should lift expectations for U.S. growth, with fairly obvious consequences for bond yields,” said Paul O’Connor, head of multi-asset at Janus Henderson Investors. “For equities the implications are more complicated, with the anticipated GDP boost being somewhat offset by the prospect of higher taxes and greater regulatory intrusion.”
World stocks gained 0.28%, towards recent record highs, and European stocks rose 0.87%. European equities rallied after a choppy start, with the Stoxx 600 rising 0.9%, and the FTSE 100 markedly outperforming with gains of ~2.3%. Banks, oil & gas and construction names are the best performers. European tech sector lagged as Nasdaq futures extend Asia’s losses, snapping through Monday’s lows.
Asia’s benchmark stock gauge swung between gains and losses as traders awaited the outcome of Senate runoff elections in Georgia, with the broader MSCI Asia Pacific Index little changed after an eight-day winning run. Equities in Southeast Asia and Australia were among the biggest losers. Benchmarks in the Philippines and Indonesia slid more than 1% on concerns over a potential resurgence in coronavirus infections and tighter government control measures. “Markets are letting go gains as races in Georgia are running tight, creating much political uncertainty that markets tend to dislike,” said Margaret Yang, a strategist at DailyFX. “If Republicans win one of the two seats, it may hinder Biden’s ambition to push through a larger stimulus plan and infrastructure projects.” Technology and health care were the biggest losers among industry groups in Asia. Energy was the best-performing sector after Saudi Arabia surprised the market with a large cut in crude production. Chinese stocks rose. Internet giants Tencent and Alibaba climbed in Hong Kong, shrugging off President Donald Trump’s order banning U.S. transactions with eight Chinese software apps. In South Korea, a bout of foreign selling saw the benchmark Kospi index reverse early gains that propelled it beyond the 3,000 mark for the first time
In response to the imminent Blue Sweep and resultant money printing bonanza, cryptos exploded and Bitcoin traded above $35,000 for the first time in Asia on Wednesday, rising to a high of $35,879 and extending a rally that has seen the digital currency rise more than 800% since mid-March. The world’s most popular cryptocurrency crossed $20,000 for the first time ever on Dec. 16.
In rates, treasury futures rose off lows for the day, although cash curve broadly hold sharp bear-steepening move after Democrats captured one seat in the Georgia runoff elections and await results on the remaining seat to secure a narrow majority. Treasury 10-year yields peaked at 1.034%, cheapest since March before settling back down to around 1.01% into early U.S. session, still cheaper by more than 5bp vs Tuesday’s close. The long- end led selloff aggressively steepened the Treasuries curve with 2s10s wider by nearly 5bp, 5s30s more than 3bp. Bund and gilt curves also bear steepened. Long-end treasuries traded ~4bps cheaper to bunds, 3bps cheaper to gilts. Peripheral spreads are marginally wider to core.
In FX, the dollar erased an intraday gain to fall 0.2% with the Bloomberg dollar index printing fresh lows for the week. “Underlying weakness of the greenback stays in place,” said Toshiya Yamauchi, chief manager for foreign-exchange margin trading at Ueda Harlow Ltd. in Tokyo. “The market needs to confirm the results of Georgia’s elections to determine trend of the dollar.”
The euro rose to as high as $1.2344, a level last seen in April 2018, while the yen hit a 10-month high of 102.57 to the dollar. The dollar hit its lowest in nearly six years against the Swiss franc. G-10 ranges are relatively narrow, but the broader trend of dollar weakness persists. NOK, AUD and NZD top the G-10 scoreboard. TRY rallies 0.8% against USD to lead gains in EM FX.
In commodities, oil prices extended gains, rising to their highest since late February, after Saudi Arabia announced a big voluntary production cut, and as an industry report showed U.S. inventories fell last week. WTI futures rose to a high of $50.45 a barrel before trimming gains, having climbed 5% on Tuesday. Brent crude futures rose 0.49% to $53.86. Spot gold drifted higher, stalling near $1,959/oz. Base metals are in the green; LME copper outperforms with a ~1.8% gain.
Looking at the day ahead, the highlight will be the aforementioned joint session of Congress to count the electoral votes from the US presidential election. Otherwise, data highlights include the services and composite PMIs from Italy, France, Germany, the Euro Area, the UK, Brazil and the US, along with the preliminary CPI reading for December from France and Germany, as well as US data on November factory orders, and the ADP’s December employment report. Finally from central banks, the FOMC will be releasing their December meeting minutes, and Bank of England Governor Bailey will be speaking before the Treasury Select Committee.
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Biden will spread stimulus money around at first but then the reality of a Democrat lead country will kick in and people will miss Trump. All the ideas I’ve heard from Democrats have been bad ones.
Too late … incrementalism is over, we’re gonna get the whole sausage and quick.
I don’t see any mention in this article about how many of us will decide to sell off “en masse”, tanking the market once reality sets in.
So what if we miss possible short term 10%+ appreciation. At least we’ll have $$$. The Apple Dumpling Gang is now running the show. I also have heard from a respected authority that Chumley the Walrus will be appointed to head the NSA and Tennessee Tuxedo will be heading the DEA.
You’ll have $$$. And you’ll be happy.
No reason for the market to tank just yet when the Fed and the Swamp will continue until the last day to digitally print and disseminate dollars at no cost to them until some day when the dollar loses any value at all, suddenly. That time is ahead, but not yet, please Lord, not yet.
In regard to crypto….if you don’t possess it…you don’t own it . If the grid etc goes down you don’t have jack.
I’d rather have 35K in gold or silver in my possession than 35K in crypto .
Lead and copper may be the most valuable commodity if and when Beto The Dork is appointed Gun Czar by Pedo Joe .
Gold is down which blows my mind, especially with the USD in the 89’s.
Stocks will at least have value assuming the companies stay in business. Some income from dividends as well. Eventually, should we emerge out the other side stocks historically will have been worth holding. The shitheads will “tank” the market from hyper inflationary Prog stupidity. Green paper has intrinsic value according to Modern Monetary Theory, “dontcha know.”
Anybody else feel like going out and beating the living shit out of RINOs and Never Trumpers? They have delivered this mess.
Hoping for “something” to happen today. Yes, the other hand IS rapidly filling with shit.
Now our only hope is that there are at least a couple of “Constitutional Democrats in the Senate. The Democrats will come after the 1st and 2nd Amendment. Nut cutting time is just around the corner. RINOS (snakes in the grass)like Ann Wagner and Paul Ryan need to be held accountable.
We the people are responsible and we WILL be held accountable good and hard.
If there is to be one of those Romulet/Capulet proscription lists, RINO Never Trumper Ryan who was 100% in on the coup, should be right at the top with the Bushes and Romney, Kinzinger, and all the RINO state executives from AZ, GA etc.
Why choose? Are you not benefited by one of your legs working with the other leg?
“For those who missed last night’s action, Raphael Warnock, a Baptist preacher from the church of Martin Luther King Jr., beat Republican incumbent Kelly Loeffler to become the first Black senator in the history of the deep South state.”
I guess Tim Scott isn’t Black enough, or South Carolina isn’t Deep South enough.
I have noticed a whole lot of firsts didn’t count because they were not communist or dark enough. Communist being much more important. There were Black REPUBLICAN congress critters as late as 1900 in the Deep South. They are completely ignored as much as the Black heroes of the Revolution.
There’s no way possible that TWO socialists/communists LEGITIMATELY won concurrent US Senate elections in Georgia, nor is there any way Biden LEGITIMATELY won in November. NO WAY AT ALL.
Got Gold?
The analysis of the market in response to the Democrat sweep is useful and interesting. About as useful and interesting as looking over the dinner menu for the Titanic just as you feel that slight rumble when the big ship slices itself apart. The truth is, there is no telling what will happen in financial and economic terms following Biden’s swearing in. There may be a few months of relative calm but eventually all hell will break loose.
This is our situation, folks. The country will soon be in the hands of a collection of what can only be called “anti-Americans”. Not a single one of these Democrats loves this country. The Democrats are a fetid collection of losers, resentful, hateful blacks, aliens, sexual perverts, and leftist Jews. The mix is leavened with a substantial number of white dingbat soccer mom’s, spoiled brats of the middle class, and a handful of white men so stupid they would play Russian roulette with a .45 automatic.
We are now careening wildly down a hard dirt road to either civil war, secession, or simply an ignominious collapse of the Republic. I am amused by people who shrug and think this will be like any other round of political musical chairs in our long-running national electoral farce. Not this time.
The Democrat Party is now in the hands of people who would have been blacklisted as Communists or Fellow Travelers in the 1950’s, and with damn good reason. They do not have an American bone in their bodies.
While it is obvious who the Domestic Enemies are, I blame the Establishment Republicans for this debacle.
These smug, self-righteous, arrogant, thoughtless bastards have handed the country to these traitors on a plate. Yeah, I know them. Met many of them in my prior life. $5000 suits, never a hair out of place, plastic smiles painted on their vacant faces. Every last one a Greg Marmalade, the goofball class president in Animal House. These stupid mofo’s think they have finally gotten rid of Trump and his pesky supporters, like scraping dog shit off of their Ferragamo’s after a walk in the park. Not so fast, Senator Hair Gel. You are the ones who will be going home.
I have always tried to do three things: avoid being too sharp elbowed about the race question, encouraged voting (even when I knew in my heart it was probably a waste of time), and, despite my pen name, never stoked regional distrust and dislike. Enough.
On the race question, we had better face up to it. Hopes of convincing any significant portion of the black population that cooperation and good will with whites are the better bet for them, are now out the window. Decades of hate-mongering by black “leaders” has done its work well. While there are many fine, decent, patriotic black Americans, they are submerged in a mass of low IQ, worthless, dishonest, and dangerous people who would put ground glass in our food if they thought they could get away with it.
On voting, that’s it. No more. This year I contributed quite a bit of money to both Trump and dozens of Republicans across the country, including a half a dozen black men and women. It is now clear that we will never regain our country through any conventional means. And don’t babble to me about demographics. In my view, the only ones who will have a voice and vote in this game will those who were here, or whose parent’s were here, before the 1965 Immigration Act, and those recent immigrants (there are many of them) who will stand with us. Any immigrant or child of recent immigrants who votes Democrat has no future in this country. They can go back where they came from.
As far as regionalism is concerned, in my lifetime I have seen my beloved South overrun by aliens – the recent vote in Georgia was largely decided by these parachutists. I am sick of Massachusetts and California and Oregon and all the rest. Yes, yes. I know there are good folks in all of the so-called Blue states. I will welcome them with open arms as we shove the enemy aliens out of the Red states.
We are headed towards Spain in 1936 or Yugoslavia after the Wall came down. Face up to it and prepare yourself. Soon you will have to harden your hearts and steel yourselves to do what you have to do. Nobody knows exactly when or how the bubble will burst or Humpty Dumpty will fall off of his wall, but it is coming.
I most fear a financial catastrophe or military disaster. Don’t think that our enemies will rush to pat Biden on the back and make friends. They know he is a puppet of the same forces that invaded Iraq, Libya,, Serbia and Syria. This time they will be ready. Trump may have rebuilt the hardware of the U.S. military but he did not have the time or wisdom to purge it of leftist diversity nonsense. Our military can cause havoc but faced with a real enemy it will fold like a cheap suit. Tell me, just how will Biden respond to the sinking of a carrier and two or three destroyers in the South China Sea or the Persian Gulf? After shitting himself, he will do nothing, because he can’t. Oh, but Biden likes the Chinese and Iran! Do you think they care? They are playing a long game, that of kicking our sorry butts out of Asia and the Middle East. No amount of cash payoffs or ass-kissing by Biden will change that.
We blew it, folks. The Founders and generations of American patriots gave us the most wonderful country in the history of the earth and we flushed it away.
One day we may rebuild it, but it will never be what it was, or could have been. Never forget those who did this and, God willing, if the time comes, see that justice is done.
Secession ahead, but weakness, too. Can the unU.S. defend anything? And here come the immigrant hordes looking for free shit and getting away from the shitholes that are models for this new one they will help create.
Nearly every movie and every commercial has blacks in them depicted as the smart ones, the decent ones, the ones who get the girl, the heroic ones, and you’d think blacks were at least half the population of the country. Whites are the dumb asses, puzzled by this and that while queers, weirdos, blacks, and whatever instruct them on the finer points of living. And when it’s not blacks, it’s the old standby: women.
The other day I heard a very smart conservative lady say that she was glad to see more “girl choirs” and that this was great because girls should have choirs like the boys do. I responded that there is little left to boys, that girls even want to be Boy Scouts. No boy wants to be a Girl Scout (some exceptions). What the hell is left for boys? Girls, women, blacks, queers, trans, gobbledygook, and all the rest have status but not boys, who are fast becoming nutless. How will secession help this when half the population everywhere you go is female (except China which saw fetal girls by the millions aborted)?
Right now the beaches in Hawaii are deserted. The Waikiki hotels are crumbling and water damaged. Who can afford the upkeep? The Chinese are buying them up on the cheap. China has over a trillion dollars in reserves. They are coming to the U.S. for the water, the fertile lands, the room to expand, and the women. Who is to stop them? Kamala? Pelosi? Schumer? Republicans?
Might be a good idea to put some resources into Bitcoin, which is calling out its usefulness as the way to move an asset from one jurisdiction to another when controls become even more about locking people in to keep them from escaping with something other than their lives and a suitcase full of clothes, mementos, and pills.
I went to Girl Scout camp with my Cousins ( I was visiting my Aunt and my Uncle was doing NASA stuff so no adults wo watch us at home ) . Man was it fun,13 years old with nothing but girls in bikini’s and your one of the few boys there.
The Chinks can expect lead poisoning from pissed off American’s .
A couple of observations:
The stock market is going up for several reasons and it will continue to go up.
1. The banks and big business control everything, especially the politicians.
2. The banks (the Fed) are pumping dollars into this market on an unprecedented scale and that will continue.
3. Wall Street doesn’t care at all about America – they only care about money and power.
4. The banks and Wall Street decided in the 1990’s to move everything economically to China. That market is 5x the USA, plus the government has total control of the entire society.
5. The people in charge love the China model. Fascism. Big banking, Big business, Big government all aligned to generate huge profits and to hold total power over the people who get nothing.
6. The China model is being implemented in the USA. That is what is happening and has been happening for decades.
7. The biggest obstacle to the current plan was Donald Trump and white heterosexual males. Both obstacles needed to be removed and have been removed.
8. MSM is not news at all. They are owned by the banks and Wall Street and they are the (very effective) propaganda (brainwashing) machine.
I could go on and on, but you get the idea. If you think in terms of the above observations, all the things that don’t seem to make any sense actually make perfect sense. Wuhan virus. Antifa. BLM. George Floyd. Tech censorship. Joe Biden. Soaring stock market. Bill Gates. Crackdown on independent small business. Masks. MSM refusal to cover stories that don’t fit the narrative. Stimulus checks. Fentanyl. Russia hoax. Charlottesville hoax. Election steal with no push back from Republicans. And lots more.
The plan is being implemented very rapidly and I see nothing to stop it. Coming soon – “Health certificates” to travel, or work, or enter a grocery store. Gun “control” then confiscation. Left wing takeovers in Texas and Florida, then in all states. Universal Basic Income – at poverty level. Electronic money. Total censorship on the internet. Police crackdowns, arrests and jail for dissenters. This all within a year or so.
This is a classic Fourth Turning. Everything will be different at the end and one side will be obliterated. Howe and Strauss warned that the outcome of a Fourth Turning was not preordained and it could easily go bad. I sincerely hope I’m wrong…but I don’t think so.
Common….every fucking commercial these days show inter-racial couples and queer couples. I don’t care who you love but fuck, they make it seem like 90% of the couples these days are inter-racial or gay .
Which 1 are you??
Markets tanking are the least of our worries. When they take your guns and the street thugs come to intimidate you, what then.
Was a small article in today’s NY Post …. said bitcoin could go as high as $143,000. Not kidding.
I’m in!! Is it possible to buy fractional bitcoins? I’m thinking in the 1/100th range.
You can buy .000000001 BTC. That’s 1/100 million.
Go to Coinbase for ease of use.
Max Keiser predicts $220,000 by October. Much higher ultimately.
Citibank estimates over $300,000.
Scott Minerd, chief investment officer of Guggenheim Investments predicts $400k
Blackrock ($7 trillion in assets managed), Druckenmiller, Paul Tudor Jones, and many other bigtime hedge fund managers are buying. Family Offices are buying.
Central banks across the world have increased the money supply in 2020 alone by $14 trillion.
Bitcoin’s market cap is $656 billion today.
Gold’s market cap is around $3 trillion.
Worldwide gov’t debt is somewhere around $60 trillion.
Total worldwide debt is around $300 trillion
https://www.economist.com/content/global_debt_clock