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Stocks' Surge Suggests Trump Win, Dollar Dives As Gold Thrives

Tyler Durden's Photo
by Tyler Durden
Tuesday, Nov 03, 2020 - 04:01 PM

For the second day in a row, stocks soared with Small Caps leading the way (up over5% in 2 days) followed by The Dow (some weakness into the close)...

As yet another short squeeze is unleashed...

Source: Bloomberg

This impressive two-day rally into Election Day is pushing the S&P 500 Index’s performance over the past three months into positive territory - a comeback for the indicator which turned negative last week - and that's good news for Trump.

A rising market has tended to precede a victory for the sitting party 86% of the time since 1928.

Source: Bloomberg

The theory proved spot on in 2016: Amid all the polls showing Hillary Clinton’s dominant lead over Trump, the equity benchmark fell for nine straight days before the election week, cementing its three-month performance into negative territory.

And all this as the odds of a blue-wave tumble...

Source: Bloomberg

But hey, the sun'll come out tomorra, betcha bottom-dollar...

The Russell 2000 is as its strongest in almost two month against Nasdaq...

Source: Bloomberg

And then there's this - China-exposed stocks have been notably underperforming domestically-focused US stocks in the last two days...which could suggest a Trump win...

Source: Bloomberg

VIX tumbled back below 35...

As Stocks rallied, bonds were sold with another big burst of selling as Asia closed and Europe opened...

Source: Bloomberg

With 10Y Yields within a tick of 90bps - the highest since June 8th (breaking and closing above the 200DMA)...

Source: Bloomberg

The yield curve (2s10s) closed at its steepest since Jan 2018...

Source: Bloomberg

The dollar tumbled on the day, breaking back below its 50DMA (1169)...

Source: Bloomberg

And HKD plunged after the Ant Group IPO was suspended, putting pressure on capital flows...

Source: Bloomberg

Bitcoin bounced back above $13,500 today...

Source: Bloomberg

Gold surged back above $1900, erasing last week's plunge...

WTI rallied once again, back above $38 intraday, ahead of tonight's inventory data...

Finally, do not panic, unless you fear the 'casedemic'...

Source: Bloomberg

And if you want an indicator for sentiment tonight - follow short-dated yuan volatility... a rise implies Trump more likely to win...

Source: Bloomberg

And if tonight is "contested", 2000 suggests bonds rally as stocks get slammed...

Source: Bloomberg

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