Trump Comments, Absurd Debate, Empty Oil Freeze Promises Lift Stocks

Despite Donald Trump’s supposedly “better” (and that’s a relative term) performance in last night’s debate, the market is pretty clearly confident that the leaked tape of the billionaire’s “locker room talk” was the death knell for his campaign as stocks rallied in Europe and jumped triple digits out of the gate on Wall Street.

There’s some chatter that the billionaire’s one-liner about putting Clinton in jail may have been enough to save his bid for the White House, but frankly we don’t see how it’s possible to recover from what all of America heard in the leaked tape - at least not considering everything else the GOP nominee has said over the last 14 months.

Here’s a recap from Credit Suisse:

“In interviews CNN conducted with registered voters who watched the debate, 57% responded that Clinton did the best job while 34% responded that Trump did the best job. However, 63% of participants did say that Trump performed better than expected.”

“Going into the debate, a major question was how Trump would handle the release of a tape from 2005 in which he made degrading comments about women. Not issuing a complete apology, he referred to his comments as “locker room talk” and quickly pivoted to a discussion of ISIS. Clinton did not push him on the issue as much as she could have, instead quoting Michelle Obama’s line from the Democratic National Convention of “when they go low, we go high.’”

“As in the first debate, Trump took the offensive. When discussing Clinton’s use of a personal e-mail account as secretary of state, he said he would ‘get a special prosecutor’ to look into the situation and that Clinton would consequently be put in jail.”

“There are now over 160 prominent Republicans who have declared that they do not support Trump – including John McCain, George Pataki, Jon Huntsman, John Kasich, and Arnold Schwarzenegger. Former Secretary of State Condoleezza Rice went as far as to ask Trump to remove himself from the race.”

Here are some of the latest polls from RealClearPolitics:

Helping risk on Monday is crude, which got a big lift above $50 after Vladimir Putin suggested a freeze or perhaps an output cut. Here are the Bloomberg headlines:

PUTIN: OIL FREEZE OR EVEN CUT SEEN AS ONLY RIGHT DECISION

PUTIN SAYS RUSSIA READY TO FREEZE OR EVEN CUT OIL OUTPUT

...and the reaction from WTI:

Unsurprisingly, the Mexican peso is doing quite well following Trump’s latest retroactive gaffe:

Here’s a bit of commentary and some visuals from Barclays which should help to flesh out what to expect (or, perhaps more appropriately “not” to expect) from the candidates should they prevail:

“The least disruptive scenario for markets and investors would be a Clinton Administration not overly influenced by the populist left and able to strike bipartisan deals with a unified GOP under Speaker Paul Ryan. In this case, a modest fiscal stimulus package with infrastructure spending, corporate tax reform with a repatriation of foreign earnings, and immigration reform are all likely in play. Two major risks would be a populist Clinton Administration that embraces an overly liberal agenda or a GOP intra-party civil war. We believe the liberal base’s demands on a Clinton Administration could lead to an overly expansive federal government with aggressive regulators. If the GOP does not unify, Clinton may expand President Obama’s use of executive authority to accomplish her goals.”

That first sentence is pretty much all you need to know when it comes to explaining today’s market rally. Finally, here’s a look at what the candidates’ respective proposals would mean for the national debt:

(Charts: Barclays)

Vote (and trade) accordingly.

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2 Comments

  • Ron

    October 11, 2016

    CNN is NOT a credible source..mostly watched by lefties and their polling shows that. All those polls your showing were rushed out prior to the debate so not so credible. Hilary looked awful in the debate and was rightly on the defense...sorry.