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Why is NASDAQ futures up?


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No blue wave = lower probability of forceful regulation of big tech, less likelihood of big increases in corporate taxes, less likelihood of massive stimulus and growth which equals lower rates which is good for tech stocks which are a long duration asset class.

 

Also Prop 22 in California shows that in one of the US’s largest most progressive/liberal states people still want cheap labor for their app based gig economy but that’s minor.

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No blue wave = lower probability of forceful regulation of big tech, less likelihood of big increases in corporate taxes, less likelihood of massive stimulus and growth which equals lower rates which is good for tech stocks which are a long duration asset class.

 

Also Prop 22 in California shows that in one of the US’s largest most progressive/liberal states people still want cheap labor for their app based gig economy but that’s minor.

 

Thanks

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Contrarian view - Trump victory is great for tech, bad for cyclicals, at least some of them. Energy is an example of this - drill drill drill got the industry in a hole, if there were more regulation, prices especially for natural gas would go up and Energy stocks would do better. Energy stocks may go up tomorrow but I don’t think it will last.

 

The other problem for cyclicals is a stronger USD with Trump than with Biden. I looked at the exchange rates last night and at some point USD.MXN was up more than 3% and its now back into the red.

 

 

A lot of the election impacts are really counterintuitive somewhat.

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Contrarian view - Trump victory is great for tech, bad for cyclicals, at least some of them. Energy is an example of this - drill drill drill got the industry in a hole, if there were more regulation, prices especially for natural gas would go up and Energy stocks would do better. Energy stocks may go up tomorrow but I don’t think it will last.

 

The other problem for cyclicals is a stronger USD with Trump than with Biden. I looked at the exchange rates last night and at some point USD.MXN was up more than 3% and its now back into the red.

 

 

A lot of the election impacts are really counterintuitive somewhat.

 

Looking at premarket, bank stocks are down, because  treasuries are down and pot. no stimulus, I suspect. Luckily I don’t own any.

 

I will get really 😡  if my defense stocks are down today

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Contrarian view - Trump victory is great for tech, bad for cyclicals, at least some of them. Energy is an example of this - drill drill drill got the industry in a hole, if there were more regulation, prices especially for natural gas would go up and Energy stocks would do better. Energy stocks may go up tomorrow but I don’t think it will last.

 

The other problem for cyclicals is a stronger USD with Trump than with Biden. I looked at the exchange rates last night and at some point USD.MXN was up more than 3% and its now back into the red.

 

 

A lot of the election impacts are really counterintuitive somewhat.

 

Looking at premarket, bank stocks are down, because  treasuries are down and pot. no stimulus, I suspect. Luckily I don’t own any.

 

I will get really 😡  if my defense stocks are down today

 

You and me both.

 

Just saw this headline:

 

https://seekingalpha.com/news/3631072-defense-sector-shakes-off-election-uncertainty

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Election? And here I thought it was just because we are in a massive bubble!

 

I do think overall its quite bullish and a major relief to pretty much everyone who has been deranged(on both sides) to ultimately see a Biden presidency with a Republican Senate, if thats how it shakes out.

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Covering?

 

We are looking at a triple top with all lower than preceding one.

 

I am thinking about buying puts here with VIX way down and pattern mentioned above.

 

As I mentioned previously, economic impact of various lockdowns, large layoffs, no stimulus for a while, no major earnings release and no 2nd Zoom like boom in the Spring will make macro-economics to deteriorate and be major focus post-election.

 

Cardboard

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Covering?

 

We are looking at a triple top with all lower than preceding one.

 

I am thinking about buying puts here with VIX way down and pattern mentioned above.

 

As I mentioned previously, economic impact of various lockdowns, large layoffs, no stimulus for a while, no major earnings release and no 2nd Zoom like boom in the Spring will make macro-economics to deteriorate and be major focus post-election.

 

Cardboard

 

I'm thinking of shifting to shorting a couple of restaurant stocks. The stimulus should happen in January and the Fed can always surprise.

I'm probably a good contrary indicator as I'm not comfortable shorting hence my trepidation and we will see the Nasdaq go down next week.

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It now boils down to Michigan and Nevada. Trump wins one and he is in but, trails both currently by a small margin.

 

Democrats would be harsh on tech companies with Crazy Warren likely to hold a high position such as Treasury Secretary. Higher taxes, anti-monopoly stance, consumer protection, lots of red tape, etc.

 

Not looking too good for banks either. Restaurants would be a high hit area and so is hospitality with pro-lockdowns shutting down the economy.

 

Cardboard

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Eh even if Michigan and Nevada turn they'll "find" some mail ins over in Georgia or NC or something. Its funny, but there's two take aways from this. 1) Trumps mini obsession with hating John McCain may have been the one thing that ultimately cost him...paying a price for one of his(many) character defects. The 2nd) it really will be the lazy bums who cant get off their asses even to vote, likely also seeking handouts, that determine the election.

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Of course the “real” reason is narrative follows price and no one knows why things are happening

 

+1, in 2016 I did a lot of pre-election selling and held a larger than normal cash position.  I believed the polls that Hillary was going to win.  I'm not good at making macro bets based on political elections, I'm not good at macro bets at all.  No more election driven investment decisions for me.  I don't know who will win or what will happen to stocks if they do.

 

 

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It's less bad than expected IMHO in terms of the blue wave.

 

Leading up to the election tech stocks / growth stocks were ripping lower.

 

Market was positioned this way (for the blue wave) and current election results are different from expectations.

 

Nasdaq 100 +5%, SPY +3.4%

 

 

 

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My dumb guesses:

 

1. Would a Biden AG keep on the anti-trust pressure started by Barr? (not sure -- though legislation seems a better avenue but with split congress will be hard and case seems shaky)

2. Will FCC reverse course, back to net-neutrality? (probably)

 

 

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My dumb guesses:

 

1. Would a Biden AG keep on the anti-trust pressure started by Barr? (not sure -- though legislation seems a better avenue but with split congress will be hard and case seems shaky)

2. Will FCC reverse course, back to net-neutrality? (probably)

 

The election is close, which means nothing untoward is going to happen to tech. This is not that great for cyclicals which don’t care about the color of the party either, but need stimulus to get moving and that is less likely with gridlock.

 

I could well be wrong - this could also be just momentum that somehow got randomly started and then everything jumps on the train because think Mr Market knows something that they don’t.

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I guess what is more certain than the election outcome is that the Senate is going to the Republicans and there isn't going to be a Blue Wave. That dispels the fear of higher taxes and more regulation which would have ruined the party for Big Tech. Interestingly a lot of healthcare stocks have bounced and they are also sensitive to taxes and regulation and not reliant on big stimulus measures for their growth.

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It is also interesting to note that the VIX is way down from ~40 to 27 now. There were probably a lot of hedges in place for the election that are now worthless or being liquidated and add to the buying pressure.

 

Personally, if the VIX goes below 20 again and I see some decent opportunities to hedge for a reasonable cost I would be interested to do so, but not at current levels.

 

This is all pretty worthless after the fact rambling, but still fun to do so.

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