FOMC Thursday.
Markets beat polls this go around, as betting markets and the market as a whole seemed to be much better barometers of this election than polls. The story of the French guy who made a bunch of money betting on Polymarkets is pretty fascinating, he argues that pollsters should use "neighbor polls" where you ask respondents who they expect their neighbor might vote for, as apparently people will indirectly reveal their preferences in that manner.
With the Trump election victory and a likely Red sweep in Congress, so-called ‘Trump trades’ performed well. How much of the move is a reaction to expected policies versus simply “relief” that the election is over is somewhat hard to disentangle, but certainly some areas that will benefit from expected tax, trade and deregulatory ideas benefited from the election news.
Crypto, yields and stocks all moved higher.
Stocks hit their 48th new year to date high even as bond yields soared. The reaction in bonds is likely some combination of expected inflation, deficits (perhaps a driver of inflation) and growth expectations.
The 2Y heads into the Fed at 4.27% and the 10Y at 4.43%. We'll see where we end up after the BoE and the Fed today. Keep an eye on Germany as well where the coalition government is collapsing.
XTOD: The Fat Joe curse continues
XTOD: So the French Polymarket guy woke up $80m richer today by simply betting that polls were wrong yet again, just like they were in 2016 and 2020. “The simplest outcome is always the most likely.”
XTOD: Inflation has been an incumbent-killer everywhere. The U.S., it turns out, was not an exception.
XTOD: Upcoming deregulation wave will create an economic sonic boom.
XTOD: "I'm short bonds. I'm not mega-short...I'm like 25% NAV short 10-year equivalent." LOL. Druck is a GOAT.
XTOD: We are often so focused on being right that we miss the advantage of simply avoiding stupidity. https://pbs.twimg.com/media/GbswynnXYBM8Z5j?format=png&name=900x900
https://x.com/DealinRugs/status/1854023185219682668
https://x.com/ecommerceshares/status/1854111601713950723
https://x.com/greg_ip/status/1854247504448979363
https://x.com/RandolphDuke7/status/1854269804904944086
https://x.com/naval/status/1854026166342238607
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