Election

My favorite tweet from the last few days:

We’ve turned the page on “Tuesday, Part 5,” and Joe Biden was officially projected to be the 46th President of the United States on Saturday, November 7. All the news networks showed footage of Biden/Harris supporters spilling into the streets. Jubilation and affirmation from the side that won, silence and disbelief from the side that lost. It has always been thus.

One thing that is distinctly different in the current scenario is how the Market reacted. In the days leading up to the election you can expect fits and starts. We mostly got starts with several +1% days for the S&P and or NASDAQ. Once Election Day came and went without a clear winner, we could have all expected the Market’s reaction: selling.

The Market abhors uncertainty. The Market more often than not reacts to an unwelcome situation more favorably than an uncertain one. So, the fact that the Market remained positive during the week of the post-election ballot counting is truly incredible. It happens that Election Day overlapped with 3rd quarter earnings season, so in a fit of uncharacteristic rationality, the Market actually did what it is supposed to do–move in relation to market-specific inputs rather than exogenous events such as elections or Twitter feuds.