The Day After

Like many of you, my day started especially early today. While it remains only a few minutes after 5:00am EST, and there is a long day ahead of us, I thought I’d pen a few thoughts.

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Markets Love Decisiveness?– While it has yet to be officially called at this moment, betting websites such as Polymarket.com, each and every electoral college projection map I’m seeing and especially stock market futures are projecting a decisive victory. In fact, most outlets are projecting a popular vote victory as well as a Senate victory.

- Due to the above, stock market futures are racing higher with the Dow projecting an open over 1,200 points higher and at the time of this writing, Small Caps are up more than 5%

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- Markets are reacting to the idea of de-regulation, favorable tax policy and the avoidance of any prolonged or challenged outcome. As we stated during our Webinar on this Presidential election, markets tend to react positively to a decision, regardless of what that decision may be. In this case, it appears financial markets really like this decision.

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Enthusiasm Will Wane?– While we’re very pleased to see green on the screens it is critical for us to remain unemotional and realize this enthusiasm will wane. We would not rush out to buy stocks at this point and for clients coming over with new capital, we will continue to remain extremely patient and disciplined by not chasing momentum or having any fear of being left out. If you find yourself underinvested or having been sour on stocks for several years, I believe there will be pullbacks and ample opportunity to re-engage with an appropriate allocation, but chasing is never a recipe for success.

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Caution Remains?– While a Republican sweep would provide continued market enthusiasm in my opinion, I continue to feel the main issue our country is facing from a financial perspective is Debt. Unfortunately, this debt will not be eliminated over night and whether it is through tariffs, growth, cost cutting or a combination of all, the ripple effects may certainly impact markets and consumers. I think these ripple effects may be an unfortunate wake up call in the future we all face in order to preserve the financial longevity of our great nation. I will remain on the path of reducing risk, especially if the enthusiasm turns to euphoria. Remember, we were positive and optimistic when it was extremely unpopular. That has now changed dramatically.

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Bonds and Rates?– At the time of this writing, 10-year treasury rates are higher sending longer bonds lower. From an economic textbook standpoint, this means that bonds are anticipating additional inflationary pressure. We believe this is due to the market’s reaction to possible Trump tariffs and the additional expense created through these measures. I think you will hear all throughout the day how Democrats underestimated inflationary pressure and yet markets are saying this morning, it may just be getting started.

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In summary, I think many would agree with me in that I am proud to live in a country where I have the ability to freely leave my home, stand in line without fear or persecution and cast my vote for what I believe to be the best candidate available.

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My grandfather stormed the beach at Iwo Jima, fighting for these freedoms and I take them very seriously. I love to discuss issues with friends and colleagues and I have the great privilege of being the father of three young men who will soon be also casting their votes and having their voices heard. I am extremely proud to be an American and while I’m pleased with the market action this morning, I am fully aware that it will be just another day in the office with the ability to care for and assist our growing list of great clients.

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I am certain there will be new developments to discuss and dissect but until then, make it a great day!

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Until next time

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~ Quint Tatro

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Did you know??Joule works with clients all throughout the United States. With our process of utilizing technology and online planning portal, there is no geographic limitation to whom we can help. If you need a second opinion or want to explore what an advisory relationship with Joule would look like, review more info on our?site?and we'dd be happy to discuss your current situation.

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