QuiCQ 20/10/2024
On the Edge
"Early to bed and early to rise makes a man healthy, wealthy, and wise."
— Benjamin Franklin
“… and tired!”
— Editor of The QuiCQ
Whilst I like to be an early riser to be at the office before 7 a.m., I still have no aspiration to join Robert Sharma’s “5 AM Club”, though today I could have been an honorable member - for once.
Wall Street closed on a strong note after a weak opening yesterday, once again shrugging off any geopolitical worries and on disappoint side leaning housing data. Especially the Nasdaq pushed decisively higher, led by a jump in Super Micro Computers (SMCI), one of Nvidia’s largest clients, after the company finally found somebody (technically called an auditor) who would help to get their bookkeeping up to, well, standards …
And speaking of Nvidia, of course, today investors get the company’s eagerly awaited Q3 earnings update. Unfortunately, they are not due to report until after the market close, but still, today, NOTHING ELSE MATTERS!
Despite a notable 1%-plus intraday rally on the S&P 500, a glance under the hood reveals some weakness. Sector performance was still tilted to the upside, with six up, five down, but substantially more stocks fell (312) than rose (191) on the day.
European stocks were, well being European and went down and stayed down.
Little movement on the yield side, with the Tens trading down to 4.33 before climbing back up to 4.40ish.
Dollar activity was remarkable, with a Dollar rally pushing the EUR/USD cross rate down from 1.06 to 1.0520 during the European morning, only to complete a roundtrip by the time of US closing, trading back at 1.06 again.
But most remarkable is probably the price action on Gold, which has recovered a swift 70 bucks in the past two sessions.
Asian markets are mixed a few moments before I hit the send button, with Japan and Hong Kong down a bit and China mainland up a tad.
The expression “Red Sweep” defines that the Republican party in the US has won the presidency, both houses and what have you … as ABBA sung: “The winner takes it all!”
Or does he/they?
Today’s COTD shows the performance of an ETF that invests into the same holdings that sitting congress members of the Democrats (NANC - blue) and of the Republicans (KRUZ - red) invest in. It stands out that not only did the Dems nearly double the Reps returns over the approximately year and a half under observation, but they also beat the S&P 500 Total Return index - a feat that most asset managers try without success.
The only question remaining is, whether, now that a red administration is taking over in January, will the Dems continue to outperform or will their “edge” fade away ….?
