Relief Rally

The so-called Clinton relief rally is under way with the S&P up over 1.5% already this morning. 

This supposedly reflects not so much a belief that HRC will win, which the money men admit that they have already priced in, but amelioration of the fear that a victorious Clinton would face a lengthy investigation, possibly leading to impeachment proceedings. 

But let's cast our minds back to June and the Brexit referendum when there was a similar spike just before the vote. There my suspicion was that the money men were drumming up optimism amongst their clients so that their own short positions would reap a fine harvest in the unpleasant aftermath. 

Something similiar might be happening here. The major indices have been stagnant all year, so these free public votes on the whole system are providing the only serious opportunity to clean up in 2016 (unless you bought into oil at the bottom). 

By 'pricing in' a demorcratic White House, the money men are setting up a fairly risk-free opportunity for shorting the market later this week. 

Trump doesn't even have to deliver a Brexit-style pollsters' worst nightmare. A narrow defeat, some serious whingeing, a bit of redneck violence around polling stations and the GOP holding on to both houses. Not as good as the full apocalypse perhaps, but good enough for the investment bankers' purposes.