Equities start the day higher as today is the day we celebrate the noted town of Columbus Ohio, home to the world famous Buckeyes. Didn’t stock markets used to take today off? Did I miss that whole era? Our bond brethren have it off so God speed you interest rate trading fools. Anyway, I spent a glorious October weekend raking leaves, picking pumpkins, and feeling constant embarrassment over the state of our Presidential election. Someone do me a favor and check the gravesite in Springfield IL to see if Lincoln is on his stomach. I had to tell my 8yr old daughter that there are a couple different names for cats and one of them isn’t exactly ready for Prime Time. Sigh, can this thing just be over please. I’d rather spend my day talking about German interest rate swaps or how to hedge gamma on a knockout option than hear another thing about our awful choices. What does the market think though? Does it prefer Clinton or Trump? That’s probably a really difficult question to answer and I have absolutely no insight that would be valuable to you but I do know this: markets love status quo. Anything that upends the apple cart or isn’t “priced in” (see Brexit) is usually bad for you and me. The market just wants to keep on keeping on and if that means Yellen doesn’t get fired on Nov 8 or the top end tax rate doesn’t rise to 80% then game on. There are 3 catalysts left for the year 1) earnings, which thankfully are upon us. 2) The Election, which thankfully isn’t far away and 3) the December Fed meeting, which thankfully happens during the holidays so maybe we’ll all be in a better mood. Ugh…I love my country but come on man…
After the open volume was nonexistent but we got a decent sized rally. Why you ask? Well my friends, oil managed to touch $51.50 a barrel and if there’s anything stocks love its high priced oil!! No macro data to speak of and earnings, while kicking off this week, still haven’t shown up yet. Twitter…let’s talk Twitter! The stock looked like this today because apparently they’ve been left at the altar. TWTR, what an amazing service, first to break any news in the world but apparently hard to monetize…who knew? I mean how hard can it be to sell a company that made Ken Bone and his Bobby Knight red sweater famous? Energy was obviously the big winner but CRM and MYL led the pack. CRM, because apparently people talked some sense into Benioff, and MYL because they cut a $465mm check to the government with a “oops my bad” card. Losers were BMY (bad drug data), DOV (bad guidance), Notre Dame (bad snapping), TWLO (bad price action after announcing a secondary), and the Cleveland Browns (bad everything / had to face an angry GOAT). By lunch we sat on 2,166, up 0.5%, which is square in the middle of the same range we’ve been in since JULY. That’s right my friends, welcome to your all passive world where the market goes nowhere for 4 months.
Themarket slid lower the rest of the session because, let’s face it, “oil is higher” isn’t exactly the strongest kind of rally we see. 2,163 that’s where we closed…the same level we closed on July 14. Did you read that right? July 14. It’s October 10th. Now I’m still in the camp that we see green numbers by Dec 30 but if we close at 2,163 there’s going to be a lot of grumpy people returning their socks to Wal Mart. Come on earnings, don’t let us down! Final Score: Dow +49bps, S&P500 +46bps, Nasdaq +69bps, Rus2k +115bps.
Volume was REALLY LOW. Our desk was better to buy. Buying in Financials and Energy. Selling in REITS and Biotech. Shorting in Industrials.
Nothing much on the news front (save for the Presidential nonsense) so let’s skip to the big finish.
I have an awesome Fail video tonight, promise me you’ll stick around until the lady in the car with the dog….