So the electoral college voted to make America great again. I like the idea of great. I’m still not sure what it means for America, but great is a compelling argument for people all over the world. What’s scary is the unknown. That fear of the unknown in the darkness of night had the DOW futures down 800 points before the opening bell. But then the sun rose and people got showered and dressed and back to their jobs at the trading desks and realized that there was probably no real reason to sell all of their clients’ assets and move to Canada before a wall is built there too. And so on the prospect of a great America, stocks didn’t lose 5% in value as anticipated last night. As a matter of fact they are up; all of the major indices are up almost 1.0% this morning–the opposite of what experts thought would happen. That sounds a lot like the outcome of the election, right?
For every winner there is a loser, and today, the loser is the bond market. The 10 Year yield has risen to just under 2.0%, the highest since last January. Thirty-year mortgage bonds are down 50 basis points from the closing bell yesterday, meaning that it’ll cost you $1,000 to get the same rate on that $200,000 loan that it did yesterday. So does “great” really mean just more expensive? My car salesman seems to think so. But that’s a subject for another day.