Market Overview: Sheer craziness may be the best way to describe market action since the Presidential election results starting trickling in last night. As it became more and more apparent that Republican Presidential nominee and billionaire businessman Donald Trump might actually win the Presidency, stock index futures began falling through the floor while gold and silver prices spiked higher. The dollar index saw heavy selling as well, while bonds and notes moved sharply higher. The upside seen in gold was the largest since the June Brexit vote, and although the yellow metal is well off from overnight highs, it has held strong gains throughout the day today. Silver has also remained stronger throughout the session today, even as stocks came roaring back to go well into positive territory (as of this writing).
Key Data Points: MBA Mortgage Applications released this morning showed a slight rise in purchase applications while refinancing activity continued to slide.
Outside Markets: Last night and today have certainly provided a roller-coaster ride for investors as stock index futures were hammered last night. Bonds and notes rose sharply last night while the dollar index saw significant declines. Many appeared to be worried over the potential carnage that could have been seen in markets today, carnage that did not, however, materialize.
Stocks recovered all of their losses to go into the green, while bonds and notes reversed course and sold off. The dollar joined in the action as well, recovering its losses from last night to move into positive territory on the day.
Markets appear to be trying to decide on a direction following last night’s stunning victory by Donald Trump. While the initial fear has apparently turned to a degree of euphoria, it may take some time for markets to sort themselves out.
The Big Picture: With a Trump Presidency comes a lot of unknowns, and investors may remain on edge until more clarity is seen regarding the President-Elect’s plans for the country and its economy. Volatility seen in the last several hours could potentially be seen again, and investors may continue to look to gold and silver as a perceived safe haven.
The next several weeks and months could potentially see expanding market volatility not only in equities but in currency and interest rate markets as well. Gold and silver are likely to be driven by overall investor sentiment as well as action in the greenback. Further discussions about the new administration’s plans for the economy going forward may also have a significant impact on global markets.