The S&P 500 is up 1.0% today and it’s being helped along by some ‘Trump trades’, including shares of his social media company DJT, which are up 14%.
DJT shares daily
Over in non-meme markets, the KRE regional bank ETF is up 1.3% and widely seen as a Trump trade. Shares of Albertsons, whose merger is less-likely to be blocked are up 1.1%. and Amazon is up 1.3% (the idea is that antitrust won’t be sought). Some LNG-related trades are also doing better.
On the flipside, the US dollar is down and that goes against the mainstream thinking on a Trump win, despite rising Treasury yields.
There is always a lingering sense in markets that someone knows something you don’t, particularly around elections. However Brexit and the two most-recent US elections showed that to be wholly untrue.
More recently, Michael Lewis tells a story about Sam Bankman-Fried’s time at Jane Street:
Bankman-Fried assigned different traders to specialize in voting data from different states. And it worked, as Jane Street was typically calling states minutes before CNN — and sometimes hours earlier — so it could place bets before other traders responded to the news, according to the book
The most dramatic moment was in the Florida panhandle, which Jane Street called five minutes before CNN, Lewis wrote. It was so pro-Trump that it swung his odds of winning the presidency from 5% to 60% on Jane Street’s system.
“We even had time to freak out, to think there must be a typo, to see that there wasn’t a typo, and say ‘Fuck it, let’s sell,'” Bankman-Fried told his biographer.
Jane Street bet several billion dollars against the S&P 500 and $250 million against other countries’ stock markets, per Lewis’ book. And it looked set to be one of its most profitable ever trades as Bankman-Fried went to sleep.
Three hours later, the US stock market had rallied. “What had been a $300 million profit for Jane Street was a now a $300 million loss,” Bankman-Fried told Lewis.
“It went from single most profitable to single worst trade in Jane Street history.”
No one knows anything, and it’s not hard to stay 5 minutes ahead of CNN when you drill down into the county data, as we have done in the past 4 US elections.