They were angry at the political establishment. The establishment that was supposed to serve the public ‘good’ but chose to enrich itself instead, neglecting the voters that brought them into power. They felt unseen, ignored, and left behind by the economy: while the economic pie was growing, their share of it kept shrinking. They were in desperate need of a better future, of a new economic reality in which they would receive a fairer slice of the pie. Like so many times before, they voted for change. Drastic change.
The new administration would bring them that change. It would put an end to economic inequality. And it would get back in touch with the people they ostensibly exist to serve. Finally, they would be taken seriously again. Seriously.
US markets reacted strongly to the news that former national-security adviser Michael Flynn had a loose interpretation of the truth in his communication with the FBI, concerning conversations with the Russian ambassador last December. Following that news on Friday, from 10:45 to 11:15 AM, in just half an hour, the S&P 500 lost two days of gains and fell back to Tuesday’s level. The NASDAQ even lost two weeks of gains: it fell back to below its 16 November level. The Dow also fell back, but mildly, to last Wednesday’s level. It didn’t take the markets long to see things in a more positive light though. Throughout the afternoon, all three indices recovered from the shock on expectations that additional progress was about to be made on tax-cut legislation. Only the NASDAQ posted a weekly loss (0.6%). The S&P 500 and the Dow both gained for another week: 1.5% and 2.9% respectively. All in all, the reaction to the Flynn news appeared to be no more than a tempest in a teapot (to the stock market, that is).
Volatility spiked during mid-morning trading, immediately after Flynn’s guilty plea. The VIX jumped from the 11-level to above 14. During late afternoon trading, calm set in again. The VIX retreated and closed at 11.43. The past week showed a volatility pattern that differed from that of previous weeks. The week started with the VIX trading single digits from Monday to mid-Tuesday. From then on, volatility picked up gradually, settling around the 11-level with occasional spikes on Thursday and Friday. UVXY ETFs gained almost 6% Friday, thanks to the volatility that day. XIV ETNs, on the other hand, dropped 3%.
December started off with a bang for Danny Daredevil. He saw his RSS rise by 6 percentage points to over 16%. Adventurous Anny‘s RSS remained unchanged at 15% as she is holding cash. Solid Suzy and Lazy Larry‘s RSS dropped to just over 71%.
None of our models gave a trading signal at the end of Friday’s session.
RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return
A one-minute strip generator production (VI)
Nobody asked for it, so here it is: another episode of the one-minute strip generator production.
Powered by stripgenerator.com and the mind of one of These Dutch Guys.
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