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“Several commentators have reflected on the fact that this may be one of the great political victories of all time.” – Richard Nixon, 11/7/72

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

As if the Election Day and post-Election Day returns weren’t enough, equity futures are positive again this morning. Today’s early gains are only modest, though, and we just got a bunch of economic reports to go through including Non-Farm Productivity (weaker than expected), Unit Labor Costs (higher than expected), and jobless claims (roughly in line) at 8:30, so the positive tone could change between now and the open. And did we mention that there’s a Fed meeting with a decision on interest rates expected at 2 PM? Markets are overwhelmingly pricing in a 25-bps cut, but what Powell says at the 2:30 press conference will be more important than the actual decision.

Regarding post-election market returns, yesterday’s 2.5% gain in the S&P 500 was historic. Since WWII, market performance the day after Presidential elections was typically negative with a median decline of 0.4% and positive returns just 42% of the time. Yesterday’s gain was the best, surpassing the prior record of 2.2% from 2020.

Small caps had an even better day. While the Russell 2000 has only existed since the late 1970s, yesterday’s 5.8% gain ranks easily as the best, nearly doubling the 3.1% gain after Trump’s last election!

One not-so-bright spot about yesterday’s rally was breadth. Normally, when the S&P 500 rallies 2% or more net breadth for the S&P 500 is also very positive at an average of +3.83. Yesterday’s net breadth reading for the S&P 500 was just +180. Since 1990, there have been 273 days that the S&P 500 rallied at least 2%; of those, only eight had a weaker daily breadth reading. And now for the trivia stat of the day. The last time the S&P 500 rallied 2%+ and net breadth was below +200 was on 11/4/20, the day after the 2020 election when breadth was negative 32!