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You Gotta Fight…For Your Right…To Pa-a-a-a-r-tay!

12-07-2016

The post-election partying continued overnight, as nearly all major bond markets rallied with equity markets following suit. As for our stock market, it was a little restrained, given the good cheer around the rest of the globe, and was just fractionally higher through midday.

In the afternoon, however, animal spirits came alive as across-the-board buying blasted the indices 1% higher. Away from stocks, green paper was a bit weaker, oil lost a percent, fixed income here was higher, and the metals perked up, led by silver, which gained 2.5% to gold's $2.00.

Waiting For the Other Shoe to Hike On the subject of gold, obviously the miners have acted a fair bit better than gold itself for the last couple of weeks or so. My hunch is that once we get past the FOMC meeting next week the pressure may come off the gold market. (For those who don't recall, the couple of weeks before and after last year's first rate hike since early 2006 set the bear market bottom for gold, with the low closing price being set the day after the FOMC meeting.)

I wouldn't be a bit surprised to see a fair amount of volatility, but I think there is a good chance that the ridiculous rate hike hysteria could also be coincident with the low in gold. Perhaps that is what the miners have been suggesting with their recent strength.