Post Election/Fed Update

Now that the two big events of the week are behind us, and we’ve had no real surprises to date, let’s take a quick review of the initial reactions in the financial markets.

Currencies: US Dollar index fell back toward the 76 support level, euro index back over 140, Swiss Franc bouncing off 50 day, Yen not moving much.

Stocks: S&P 500 sold off immediately after Fed, then rallied into the close, finishing just under 1,200. Volatility index plunged.

Bonds: Treasury yield curve steepened, long bond finished with a 4 handle for the first time since May.

Commodities: Oil closed above $85 on dollar weakness, CRB index at a new post-Lehman high, gold held support at $1,325 but closed with a small loss.

Overall, no major movement outside what we have been anticipating,  but the dollar remains key and the 76 support level remains crucial. The coming days will tell us quite a bit about the trends through the end of the year, and I will position my portfolios accordingly.


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