Jakobsen: Election to Cause Volatility

“Clearly what we have right now is a market that is finally realizing that this could be a repeat of what we saw in the UK in terms of Brexit — not necessarily meaning that Trump will prevail, but certainly that it will be much tighter come election day.

“That’s really the theme of the week, and that of course is coming in the form of increased volatility.”

Jakobsen believes the volatility will continue through December as investors weigh a potential Fed rate hike, regardless of who wins the White House next Tuesday. But the odds of a recession will increase sharply if the incumbent party prevails.

“It’s almost guaranteed that a Clinton victory is ‘safe’ and the Fed will move in December. And, in my opinion, that will increase the probability of a recession in the US to something like 60 to 70 percent.”

– Excerpt contributed by Jason Kelly

Z-val: Steen Jakobsen
Date: 11/2/16
Disposition: Short-Term Bearish
S&P 500 on 11/2/16: 2098
S&P 500 on 12/30/16: 2239
Change: +6.7%
Judgment: Wrong

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