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The outcome of the US election is unpredictable. US bond traders are 'lightly armed' to face a crucial week.
One day before the countdown to the US presidential election, the election situation affects various regional stock markets, with Japan's market closed today for a holiday, regional stock markets thriving, and a vibrant scene.
Looking back at the Malaysian stock market, the FBM KLCI index $FTSE Bursa Malaysia KLCI Index (.KLSE.MY)$ 以1607.75微高迎市后，最高曾上攀1615.95，窄幅震荡。
大部分蓝筹股都是上扬，不过银行股确实两极分化趋势，马股龙头马银行 $MAYBANK (1155.MY)$ 领涨综合指数，而二当家大众银行 $PBBANK (1295.MY)$ 今日挫1.35%，限制综合指数涨幅。
富时隆综指中午休市时收在1611.65点，起7.67点或0.48%。
半天成交量有1.4 billion50.92 million1600股，成交值1 billion57.26 million4955令吉。
富时大马全股项指数，休市报12186.10点， 起57.76点。
上升股464只，下跌股441只，446只无起落，1020只无交易。
As of 12:30 PM, the exchange rate of 1 US dollar to Malaysian Ringgit is at 4.3620 level.
Focus on the US election.
Wall Street's attention is locked on the US election.
But the actual betting is not aggressive.
With only one trading day left until the US election day, voters will cast their votes on Tuesday to elect the next US president, which will influence the future direction of the US economy for the next four years.
Traders are discussing various possibilities, constantly checking the latest opinion polls and the trend of the election gambling market to predict who is leading, Trump or Biden, and what this means for their trading positions.
In some markets, some speculate that Wall Street is betting on Trump. However, when it comes to actually investing money in the stock market based on this, everyone remains calm.
Professional investors know that trading predicting the winner before the fact often reaps great profits. However, the problem is that this election has both sides evenly matched, so for many investors, if expectations fall short, the risk will be unbearable.
Wealth Alliance President and General Manager Eric Didden stated in an interview: "We do not hold positions ahead of the election results, because betting on it is like flipping a coin and has no meaning."
Most traders expect the market to be volatile this week, and the amplitude of the volatility may be significant, as the controversial outcome is likely to delay the counting time for weeks or even months.
This explains why the Chicago Board Options Exchange Volatility Index has risen to over 20 in the past four trading days, a level that usually indicates increased market pressure. This is also why investors are not in a rush to make investment choices based on election result expectations.
JonesTrading stock sales trader and macro strategist Dave Lutz said, "Past opinion polls have been way off, so it's not certain who will win or lose."
Reducing speculation by holding more cash.
Another challenge that position allocation faces is a series of other factors that may affect market trends before and after the election. After Election Day, the Fed will announce its interest rate decision on Thursday, and Fed Chairman Powell will hold a press conference to provide details on the central bank's interest rate path.
In addition, a large number of US companies will announce their performance, including chip giant Nvidia, expected to release its financial report on November 20th.
This explains why Dave Lutz did not specifically build positions for the election. Instead, his advice is to "hold some cash" to deploy when any short-term opportunities arise, such as individual stocks or sectors that react instinctively when the winner is determined.
"I want to say, many investors are operating in this way."
Taking Blanke Schein Wealth Management's Chief Investment Officer Robert Shine as an example, he stated that he increased the cash equivalent holding ratio from the usual 5% to 10% before the election.
His strategy is to be prepared to buy assets massively when inevitably the results trigger market volatility in at least some parts.
Antoine Hochet-Guillaume, Chief Investment Officer of Global Asset Allocation at Northern Trust Asset Management, stated in an interview that investors need to carefully observe election risks.
"Traders cannot even open positions at this point because there is a lot of speculation, and traders do not know which policy proposals of any candidate will actually pass in Congress."
"Traders cannot even open positions at this point because there is a lot of speculation, and traders do not know which policy proposals of any candidate will actually pass in Congress."
The market appears nervous, which may not be surprising. The s&p 500 index is trading near historical highs, while the volatility index VIX exceeds 20.
The last time the s&p 500 index hit record highs while the panic index VIX reached such a high level was during the outbreak of the Covid-19 Delta variant in March 2021.
At the same time, hedge funds are betting that price fluctuations will be greater. Data compiled by the Commodity Futures Trading Commission (CFTC) earlier showed that large speculators have turned net long on VIX futures for the first time since January 2019.
The outcome of the US election is hard to predict.
But the actual betting is not aggressive.
With only one trading day left until the US election day, voters will cast their votes on Tuesday to elect the next US president, which will influence the future direction of the US economy for the next four years.
Traders are discussing various possibilities, constantly checking the latest opinion polls and the trend of the election gambling market to predict who is leading, Trump or Biden, and what this means for their trading positions.
In some markets, some speculate that Wall Street is betting on Trump. However, when it comes to actually investing money in the stock market based on this, everyone remains calm.
Professional investors know that trading predicting the winner before the fact often reaps great profits. However, the problem is that this election has both sides evenly matched, so for many investors, if expectations fall short, the risk will be unbearable.
Wealth Alliance President and General Manager Eric Didden stated in an interview: "We do not hold positions ahead of the election results, because betting on it is like flipping a coin and has no meaning."
Most traders expect the market to be volatile this week, and the amplitude of the volatility may be significant, as the controversial outcome is likely to delay the counting time for weeks or even months.
This explains why the Chicago Board Options Exchange Volatility Index has risen to over 20 in the past four trading days, a level that usually indicates increased market pressure. This is also why investors are not in a rush to make investment choices based on election result expectations.
JonesTrading stock sales trader and macro strategist Dave Lutz said, "Past opinion polls have been way off, so it's not certain who will win or lose."
Reducing speculation by holding more cash.
Another challenge that position allocation faces is a series of other factors that may affect market trends before and after the election. After Election Day, the Fed will announce its interest rate decision on Thursday, and Fed Chairman Powell will hold a press conference to provide details on the central bank's interest rate path.
In addition, a large number of US companies will announce their performance, including chip giant Nvidia, expected to release its financial report on November 20th.
This explains why Dave Lutz did not specifically build positions for the election. Instead, his advice is to "hold some cash" to deploy when any short-term opportunities arise, such as individual stocks or sectors that react instinctively when the winner is determined.
"I want to say, many investors are operating in this way."
Taking Blanke Schein Wealth Management's Chief Investment Officer Robert Shine as an example, he stated that he increased the cash equivalent holding ratio from the usual 5% to 10% before the election.
His strategy is to be prepared to buy assets massively when inevitably the results trigger market volatility in at least some parts.
Antoine Hochet-Guillaume, Chief Investment Officer of Global Asset Allocation at Northern Trust Asset Management, stated in an interview that investors need to carefully observe election risks.
"Traders cannot even open positions at this point because there is a lot of speculation, and traders do not know which policy proposals of any candidate will actually pass in Congress."
"Traders cannot even open positions at this point because there is a lot of speculation, and traders do not know which policy proposals of any candidate will actually pass in Congress."
The market appears nervous, which may not be surprising. The s&p 500 index is trading near historical highs, while the volatility index VIX exceeds 20.
The last time the s&p 500 index hit record highs while the panic index VIX reached such a high level was during the outbreak of the Covid-19 Delta variant in March 2021.
At the same time, hedge funds are betting that price fluctuations will be greater. Data compiled by the Commodity Futures Trading Commission (CFTC) earlier showed that large speculators have turned net long on VIX futures for the first time since January 2019.
The outcome of the US election is hard to predict.
US bond traders are 'lightening up' for a crucial week.
After driving US Treasury yields higher for several weeks, traders are lowering their bets ahead of the US election, as they are unwilling to speculate on bonds with the situation evenly poised between the two candidates.
As an important week begins, Wall Street is speculating on various scenarios for the bond market after the election, with the message from the market indicating a lack of confidence in the future path.
Traders can almost certainly expect a 25 basis point rate cut by the Fed on Thursday, but beyond that, the outlook heading into 2025 depends on the election results of the President and Congress, which will impact everything from taxes to tariffs and the Fed's stance over the next few years.
For investors planning their next moves, another complex issue is that Wall Street is making starkly different predictions about the future outlook.
As for investors planning their next steps, another complex issue is the starkly different predictions being made on Wall Street about the future outlook.
Republican Party wins all
Strategists unanimously believe that if the Republican Party sweeps its opponents, bond holders will undoubtedly suffer, as they have just experienced the largest monthly decline in two years.
With the expectation of the Republican Party controlling Congress and Donald Trump returning to the White House, the market anticipates that he will implement tax cuts and tariff plans, thereby expanding the federal deficit and reigniting inflation.
With more speculation about this outcome, combined with signs of economic resilience, helping to push the 10-year Treasury yield to a four-month high before the election, reaching close to 4.4%.
Washington is divided
If the sharp decline in bonds in October is due to betting on a Republican Party landslide victory, then if He Jinli ultimately wins, it may ignite a rebound.
Barclays strategists say that if He Jinli wins and the Republican Party takes control of one chamber of Congress or both houses, it will result in bond strength, as this will eliminate the risk of new tariffs and significantly expanding deficits.
This will also bring the risk of bullish bonds, with the risk of fiscal cliffs possibly pushing the 10-year Treasury yield down by as much as 25 basis points.
不太清楚的是，其他选举结果情境下市场将如何发展。挑战来自两个方面，一是消除各种政策组合对市场的影响，二是弄清楚投资者已经消化了哪些因素。After driving US Treasury yields higher for several weeks, traders are lowering their bets ahead of the US election, as they are unwilling to speculate on bonds with the situation evenly poised between the two candidates.
As an important week begins, Wall Street is speculating on various scenarios for the bond market after the election, with the message from the market indicating a lack of confidence in the future path.
Traders can almost certainly expect a 25 basis point rate cut by the Fed on Thursday, but beyond that, the outlook heading into 2025 depends on the election results of the President and Congress, which will impact everything from taxes to tariffs and the Fed's stance over the next few years.
For investors planning their next moves, another complex issue is that Wall Street is making starkly different predictions about the future outlook.
As for investors planning their next steps, another complex issue is the starkly different predictions being made on Wall Street about the future outlook.
Republican Party wins all
Strategists unanimously believe that if the Republican Party sweeps its opponents, bond holders will undoubtedly suffer, as they have just experienced the largest monthly decline in two years.
With the expectation of the Republican Party controlling Congress and Donald Trump returning to the White House, the market anticipates that he will implement tax cuts and tariff plans, thereby expanding the federal deficit and reigniting inflation.
With more speculation about this outcome, combined with signs of economic resilience, helping to push the 10-year Treasury yield to a four-month high before the election, reaching close to 4.4%.
Washington is divided
If the sharp decline in bonds in October is due to betting on a Republican Party landslide victory, then if He Jinli ultimately wins, it may ignite a rebound.
Barclays strategists say that if He Jinli wins and the Republican Party takes control of one chamber of Congress or both houses, it will result in bond strength, as this will eliminate the risk of new tariffs and significantly expanding deficits.
This will also bring the risk of bullish bonds, with the risk of fiscal cliffs possibly pushing the 10-year Treasury yield down by as much as 25 basis points.
德意志银行证券策略师预计，在特朗普获胜且国会分属两党的情况下，收益率将全线下跌，部分原因是财政刺激措施将减少。
然而，巴克莱的研究表明，如果共和党有能力实施关税政策，但很难让减税法案在国会获得通
过，那么将推高短期收益率，而长期收益率将不受影响。
民主党全胜
如果民主党大获全胜，富国银行策略师预计这种情境下政府增加支出，从而推高收益率。
RBC Capital则表示，这种情境最有利于债券，因为这将导致企业税上调，加剧“不利于企业”的环境，并削弱风险偏好。
德意志银行证券的美国利率研究主管马修拉斯金表示，归根结底的一个问题是，几乎不可能非常精确地预测市场将如何反应。
"Even though we know what policies are going to be implemented, we are quite uncertain about the impact of these policies - especially tariffs - on financial markets, including interest rates."
Investors seem only highly convinced that the bond market will be volatile.
The ICE Bank of America Volatility Index has risen to its highest level in a year, far above the levels before the 2020 and 2016 elections.
Morgan Stanley's chief fixed income strategist, Vishwanath Tirupattur, said he is waiting for event risks to pass before taking action.
Source: Nanyang Siang Pau
Disclaimer: This content is for reference and education purposes only and does not constitute any specific investment, investment strategy, or endorsement. Readers should bear any risks and responsibilities arising from reliance on this content. Before making any investment decisions, it is essential to conduct independent investigations and assessments and consult professionals when necessary. The author and relevant participants are not responsible for any losses or damages arising from the use of or reliance on the information contained in this article.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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