Debate Aftermath, Oil and Deutsch Bank Lean On Markets

The general assessment of at least the markets is that Hillary Clinton “won” last night’s debate. That sent the U.S. dollar higher and gold prices lower. It also helped equities rise, although there the story is more nuanced.

This is not to say that Mrs. Clinton said better or smarter things than Mr. Trump, but rather that the markets abhor uncertainty and with Mrs. Clinton they know that, more or less, current policies will continue. The boat will not be rocked. Mr. Trump, whether you agree with his ideas or not, represents an unknown quantity.

With that said, the VIX volatility index fell about 9.5% today.

The drop of about $11.00 per ounce in gold can be attributed to a sense that safe haven plays are not crucial at the moment. The benchmark U.S. 10-year bond yield fell to around 1.55%, the lowest in the last thirty days.

The greenback was up strongly against the euro, (adding to gold’s woes), on further uncertainty concerning the state of Deutsche Bank’s soundness and the consequences it faces for breaking U.S. banking rules. The German government said yesterday that it would not assist the huge bank in its battle with the U.S. Department of Justice.

On the continuing effect of that news, Deutsche Bank hit fresh record lows. That in turn dragged down the German DAX, French CAC and London FTSE stock indexes, although the heavy bleeding seems to have been stanched for the moment.

Asian stocks took the news of the American presidential debates in very good cheer, moving up especially solidly in Tokyo and Hong Kong. Shanghai lagged on t growth issues.

In New York, stocks were up despite a very raggedy day for oil. The Dow Jones Industrial Average rose almost 0.70% while the S&P 500 was up about 0.55%. The tech-heavy NASDAQ was up 0.80% on the sunny prospects of what are called the FANGs – Facebook, Amazon, Netflix and Google (Alphabet).

There was also good buzz sentiment on Twitter, which is having its tires kicked by a number of high-flying players like Disney and Microsoft. Twitter needs to be acquired in order to change, grow and reach its full potential.

West Texas intermediate slipped back well below the $45 per barrel mark, off 3.10% on the day. The word is that nothing much will be coming out of this week’s Algiers meeting of OPEC and its oil-producing cohorts.

The famous film and radio director, Orson Welles said of elections: “Popularity should be no scale for the election of politicians. If it would depend on popularity, Donald Duck and The Muppets would take seats in senate.”

Wishing you as always, good trading,