Tl;dr: One word supports much of today's equity exuberance: "hedged" as the 'priced in' anxiety over a blue wave came to pass and so protection was unwound, slamming vols, and driving up stocks from ugly (data-centers/AI CapEx is dead) overnight lows (though we might add the word "rotation" to today's narrative). Tangential to this, oil priced plummeted as traders interpreted some penance from The White House as meaning a sooner end (less escalation) to the Iran War. That punched bond yields lower (despite solid macro as BEs plummeted) which dragged down the dollar, supporting gold and crypto (despite the latter now in the crosshairs).
Hedges were shredded...
Meanwhile, you cannot make this shit up.. from Trump!
First things first though, the question everyone has asked all day...
Why the rebound?
The goal-seeking for a bullish narrative was strong among the sell-side analysts today. Here's a roundup of some of the more reasonable ideas behind today's bounce...
- Clarity - the event is passed and Trump "absolutely willing" to accept the results
- Gridlock - lowers the risk premium. Dem majority plus
