‘Scrap That’: Traders Lose the Plot in Night of 1,000 Twists
(Bloomberg) -- Wall Street, like the rest of America, had a really long election night.
Fifteen hours after the first election returns rolled in and the prospects for a quick, clear sense of who the next U.S. president would be vanished, weary traders downed a sixth cup of coffee and tried to make sense of what happened.
After staring at futures, watching financial TV and analyzing charts, Paul Nolte, a portfolio manager at Kingsview Investment Management, turned to something to settle his nerves: “A bottle of bourbon was the only way I could make it through the night.”
Steve Chiavarone, a portfolio manager and equity strategist at Federated Hermes said that while the evening played out largely along his firm’s expectations, he still spent a lot of time Facetiming with teammates and answering text messages.
“It was like a big sleepover with some of your good friends, nerding out,” said Chiavarone.
But the long hours required raiding his kid’s Halloween candy stash. And there might have been a glass or two of bourbon consumed. “I had dinner but I don’t remember what it was,” he said. “It seems like it was that long ago.”
Through the night, Former Vice President Joe Biden appeared to be inching ahead of President Donald Trump in key states after falling behind early in many of them. And the Senate appeared poised to remain in Republican control.
Anthony Saglimbene had a job you wouldn’t wish on anyone on a night like that: capturing all the gyrations in a market commentary he sends to clients of Ameriprise Financial every morning. As the S&P 500 December futures contract swung from gains to losses and back, many a draft hit the waste basket.
“It’s looking like a blue wave. You write a little bit. And then you realize as the night goes that’s not really how it’s going,” said Saglimbene, who lives in Rochester, Michigan, the middle of a key battleground state. “Scrap that. Start rewriting.”
By Wednesday morning, the Nasdaq 100 surged nearly 5% while the S&P 500 Index climbed 3.4% and Treasury bonds rallied, a reflection of how, in the end, investors believe whatever the final outcome is that the bull market in stocks will likely continue.
But some traders missed the camaraderie of election night on the trading floor. Still, it was easier getting people to take the midnight to 6 a.m. shift because they could work from home.
“When I am trying to listen intently to commentary, be it election results like last night or if I’m listening to a podcast, I sit with adult coloring books,” said Liz Ann Sonders, Charles Schwab Corp.’s chief investment strategist. “That’s what I did for several hours last night.”
Others focused using different methods. Ed Al-Hussainy, senior strategist for Columbia Threadneedle, pared down to just a laptop. “When I’m sitting in front of my five monitors, I’ve got 10 different websites open, I’ve got streams of market info, I’ve got commentary from everyone,” he said, “but last night, it would have been super distracting.”
Nick Colas, co-founder of DataTrek Research, took a drive around Manhattan around 11 p.m., where almost every storefront in midtown was boarded up in anticipation of potential unrest.
“New Yorkers occasionally get grief for being bluntly direct, fact-based, ‘what’s your point?’ sorts of people, and all the preparations for potential post-Election mayhem here fit that mold,” Colas wrote in a note to clients. “With any luck, we won’t need them. But just like risk management in investing, a little preparation goes a long way.”
Election Map Obsessions
Lights were burning in Europe, too.
“I spent a sleepless night in London fueled by copious amounts of coffee while the results trickled in slower than expected,” said Michael Brown, a senior market analyst at Caxton FX. “I’ve spent enough time looking at Electoral College maps over the last 18 hours to last a lifetime.”
In Germany, Guillermo Hernandez Sampere, head of trading at MPPM EK, said that it was “the first time in six months when I didn’t hear of Covid-19 throughout the day -- the attention had shifted entirely to the election.
“I was totally taken by surprise by Trump’s comments that he would try to stop vote counting,” he added. “It was shocking.”
But some investors welcomed the plot twists. David Giroux, portfolio manager of the T. Rowe Price Capital Appreciation Fund, which oversees about $40.8 billion, said that many investors were encouraged by the likelihood that Republicans will maintain control of the Senate, since a divided government would mean “no big tax increases, no crazy health-care policies.”
“It’s like when you get a Christmas gift, and you think you’re going to get a certain gift, and it’s not that,” he said. “But it’s actually better than the gift you were hoping for.”
In Costa Mesa, California, Max Gokhman got through the night with the help of his “two friends,” as he called them: cold brew and bourbon. Eventually, the head of asset allocation for Pacific Life Fund Advisors was left alone with his drinks and election scenario tracking models. His wife couldn’t take the suspense and went to bed. His six-year-old German shepherd Wally lost interest, too.
“It wound up just being me and my home office, with the tender glow of the three screens reflecting off of my whiskey snifter.”
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