The week is almost over. Finally.
And for bond traders, it already is.
Friday is Veterans Day in the US, and as a result bond markets will be closed after a wild week for Treasuries following the election of Donald Trump as the next US president while stocks will be open for a full day.
In economic news, a speech from Federal Reserve vice chair Stanley Fischer and the preliminary report on consumer confidence in November from the University of Michigan will highlight the morning.
Stocks — or at least the Dow — have been in rally mode since about midnight Tuesday in the wake of Donald Trump’s surprise election as the next US president.
On Thursday, the Dow hit a record high, closing at 18,807.88. Since the overnight lows on Tuesday, Dow futures are up about 7%.
Thursday’s market action, however, saw a more meaningful divergence from Wednesday as technology stocks and dividend payers were notable losers while bank stocks rallied hard.
Tech stocks are dealing with the potential for more restrictive trade policies under a Trump administration hurting business. Not to be dismissed, however, is an idea that floated around markets Thursday that because Donald Trump directed so much ire against Silicon Valley during his campaign, the sector could, somehow, come under pressure during a Trump administration.
Dividend paying stocks, notably utilities, were under pressure Thursday as bond yields rose. These stocks had been used a so-called “bond proxies” given their regular income streams and record-low bond yields.
As of the close Thursday, the US 10-year bond yield was sitting just below 2.14%, the 5-year note was at 1.55%, and the 2-year note was at 0.91%.
In a note out Thursday, Bank of America Merrill Lynch circulated a post-election edition of its closely-followed fund managers survey to take the pulse of big-money investors after the election.
Among the fund managers surveyed by the firm, 30% said their most likely action following the election would be to buy the S&P 500.
15% of respondents said they’d sell risk assets — think stocks or high-yield bonds — and 12% said they’d buy gold.
Of note in this report, 59% of managers said Donald Trump’s victory would not affect their cash holdings. BAML added that this election is not seen as a “game-changer” for interest rates or corporate earnings, and on balance, money mangers see the recent moves across markets as tactical rather than fundamental.
The most important lesson long-term investors learned from the election? Don’t panic. (Yahoo Finance)
Trump’s acceptance speech seems to be the catalyst for the recent market rally (WSJ)
China wants a rival to the TPP (FT)
What Trump’s team saw heading into the election — and what everyone else missed (Bloomberg)
Could Bernie Sanders have defeated Trump? (WaPo)
Donald Trump’s election deepens racial divides in NFL locker rooms (Bleacher Report)
After 10 quarters, Jeremy Grantham bails on his call for a stock market bubble (GMO)
Myles Udland is a writer at Yahoo Finance.