How Goldman Sachs, JPMorgan, Citi, and Bank of America are trading the US election
The expected knee-jerk reactions across asset classes and a view on whatever we see Wednesday in markets will persist.
Here’s a summary of how some of the biggest institutions on Wall Street expect markets to react to different US election outcomes across different asset classes, as well as some broader thoughts on what will work, what won’t, and for how long:
The views of John Flood, head of Americas equities sales trading at Goldman Sachs, from an email to clients on Tuesday:
A November 4 note from JPMorgan, drawing on work from their FX and fixed-income strategy teams:
An October 25 note from Citi’s global-asset allocation team:
A November 3 note from Bank of America’s equity and quant strategy team:
“We believe a big knee-jerk reaction (2%+) should be faded.”
However, “Interestingly, post-election price momentum typically continues into following weeks. The direction of two-week returns following the day after an election was the same as the direction of the day after the election 100% of the time during the prior seven elections (since 1996) and 79% of the time since 1928.”
