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The Morning Hammer: Happy Election Day?


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I'd say Happy Election Day but there's doesn't seem to be much happiness out there today.

So I added a question mark.
If there's one sign of the times… it's the lack of signs.

I've lived in Brooklyn, NY my whole life, and every election, I've seen tons of signs for Presidential candidates in front of people's homes.

This time around… nada.

Anecdotes aren't evidence, but I think this says something about the state of affairs.

It seems like the market wants Hillary Clinton to win to avoid the Trump wild card.

I guess folks will decide the ramifications of a Clinton Presidency after the fact.

However, what's most important is resolution.

The market wants a clean Clinton victory without Trump disputing the results and extending the spectacle.

That said, I wouldn't count Donald out until the final vote is tallied.

Reuters is saying it sees a 90% chance of Clinton winning.

But Trump was never supposed to even be in this race. Yet here he is at the homestretch.

The Brexit was not supposed to happen. Yet it did.

Futures are down slightly this morning, which feels like run-of-the-mill profit-taking after yesterday's big surge.

One interesting story I caught yesterday was Reuters' report of Wall Street banks prepping for Brexit-like turmoil tomorrow.

That may reduce the chances of a massively negative reaction to a Trump win or a sell-the-news reaction to a Clinton victory.

In recent years, investors have generally overhedged, in the process throwing away untold billions of dollars on put options.

Look at the chart below of the ISE Sentiment Index since inception in 2002.:

As you can see, it's slowly drifted lower, which means that put option demand has grown relative to call option demand.

We'll soon see if the recent spate of put buying was just another big waste of investor cash.

Good luck out there.