Making sense of the post-election market action

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The FT bravely takes on the narrative of the wild swings in market sentiment before/after the election. The verdict: no one knows anything.

Yesterday we saw a few commentators note that the market was rallying because of the increasing certainty that Obama would be re-elected and the leadership of the two branches of Congress would remain the same. Today, with that certainty firmly established, the markets have wiped out all of yesterday’s gains — and the argument is the precise opposite: the certainty that Barack Obama is president and the House remains Republican mean further gridlock.

Bespoke shows that large declines in stocks are common the day after a Democrat is elected President.

Author: Adam Button

Adam Button is the managing editor of ForexLive™. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.


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Adam Button


  1. Well looks like Kennedy, Clinton and others are spared.

  2. The market´s “reaction” is the schizophrenic reaction of some right wing financial market players demonstrating their disappointment their private equity guy didn´t make it. Yada, yada, yada. What a mess that Mitt cannot invite his millionaire buddies for lunch into the Oval Office.

    Fiscal cliff angst? Come on, hedge funds are adding to equity longs. There is interest rate certainty at least until 2014. Simply go long and enjoy the ride.

  3. Well, I think the “risk off” move was not unexpected, due to the harder path in resolving the fiscal cliff, given the debt ceiling debacle.
    And, Draghi added fuel to the fire to make sure that would be the reaction :)

  4. Yohay, you were right all along matey. Good call!

    By the way, you’re not right wing and a millionaire by any chance? ;)

  5. Thanks!
    Not right wing and not millionaire… I wouldn’t be busy writing so much if I were a millionaire. I would easily fill my time with other activities…


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