Well FBI chief James Comey’s decision that there were no new revelations in the newly found emails sent stocks in the US soaring, despite polls saying that key background states were tightening.
On the Monday morning before the presidential election, the Dow Jones industrial index was up 238 points, with the S&P up 29 points. Giving credence to the thought that a Hillary Clinton win would be market friendly. Stocks were having the longest losing streak since the 1980’s on the news that Clinton was being probed again over top-secret emails found on Anthony Weiner’s computer.
Now understanding that this is a polarizing election, but if a candidate has to rely on the FBI to say that there is evidence of wrong doing but not enough wrong doing to bring charges, do you consider that vindication? Do you then consider that the candidate is trustworthy to become president?
Up to the individual voter to determine. But should Americans take this market reaction as vindication that the “right” candidate may win, or has a better chance of winning?
Or should we look at this as the market celebrating a continuation of the eight years under Obama, where they did well, while the rest of America suffered from quality job losses only to be replaced by lower paying, part-time service jobs with little in benefits?
Are the markets aligned with the average American? Since a majority of Americans have little or nothing invested in the markets, I would say the simple answer is no.
The stock market is not the economy, it is so divorced from the sentiment on Main Street now with all the Federal Reserve involvement that true price discovery and investor sentiment has been lost.
Why worry of your investments, when markets are almost guaranteed to hit news highs?
So my reaction to the markets soaring on the FBI news tells me Wall Street sentiment is: Come on in water’s fine, no big waves coming to swamp us for four more years.
But if you are not in the water, then you may suffer like you did over the last eight years.