"Elections have consequences." - Obama
"I conjecture that if you gave an investor the next day’s news 24 hours in advance, he would go bust in less than a year.” - Taleb
Are you familiar with the "crystal ball trading challenge"? Basically it's an experiment where participants are given the front page of the WSJ in advance and you basically get to trade knowing that information. The result was people did poorly, you can read more here. In a post by Victor Haghani, the conclusion is summarized as:
Most stories involving people seeing into the future... don’t have “happily ever after” endings. There are usually unintended consequences that come with perfect prescience – a reminder that even prophets can’t escape risk and uncertainty. The best we mortals can do is make our decisions with a framework that explicitly accounts for the presence of risk in just about every big choice we face.
Whether we know the election results by the end of the day or not, doesn't necessarily mean we will understand the market reaction. On top of that we often forget that everything can change because of some tiny event that no one is thinking about (ex. don't forget about Iran, Russia, etc.).
In yesterday's new Factory Orders fell in line with expectations but showed decent growth in core durable goods. The 3Y Note auction tailed by 0.9bps, printing 4.152%. Bond yields fell with the narrative centered around increasing odds of Harris winning.
Heading into the day we have the S&P at 5,712, the Nasdaq at 18,179, the Dow at 41,794, the 2Y at 4.18% and the 10Y at 4.29%. Where will it be this time tomorrow?
On the day ahead we get services data and the 10Y Auction.
XTOD: Time to trot out the Hindsight Bias Buster. To keep yourself from saying, after the election, that you knew all along that what did happen would happen, take a moment to leave a record for yourself.
Your predictions for:
the Electoral College vote (must sum to 538):
Trump _____
Harris _____
the popular vote:
Trump ___%
Harris ___%
XTOD: Goldman has some potential reaction functions: 🇺🇸
* Trump w/ Republican Sweep = 25% probability; S&P +3%
* Trump w/ Divided Government = 30% probability; S&P +1.5%
* Harris w/ Democratic Sweep = 5% probability; S&P -3%
* Harris w/ Divided Government = 40% probability; S&P -1.5%
XTOD: NOBODY: WALL STREET/ SILICON VALLEY: what if private credit bubble was combined with AI bubble and then Nvidia related-party transactions were thrown in just for fun???
XTOD: Iranian-Backed Channels in Iraq are claiming that a Large Swarm of Drones have been launched from Iraqi and Syrian Territory towards Israel.
XTOD: Al Pacino. Love the work. "I want to do this forever." https://pbs.twimg.com/media/GbfVw0CagAAeWgD?format=png&name=900x900
https://x.com/jasonzweigwsj/status/1852761586844193038
https://x.com/carlquintanilla/status/1853487508388266141
https://x.com/sindap/status/1853390999860470207
https://x.com/sentdefender/status/1853530296647606299
https://x.com/FrederikNeckar/status/1853185671869157786
No comments:
Post a Comment