Overnight markets plunged as election results trickled in pointing to an earthshattering victory by underdog Republican candidate, Donald Trump. Dow futures (YM) fell 975 points within a 4-hour span as investors grew wary about the policies promised on the campaign trail.
However, the markets recovered quickly & were seemingly unscathed by the time the opening bell rang in Wall St.
Gold Futures (GC), which is typically bullish when there is uncertainty and fear in the market, posted roughly a 70-point overnight gain. As of mid-Wednesday morning, the precious metal has since leveled off to the high 1280’s, only 10 points ahead of yesterday’s close.
The CBOE Volatility Index (VIX), largely used to gauge fear within the market, fell sharply at the opening bell to its lowest level since late October. This drop signifies that investors have regained some confidence knowing which political party will have the reins in Washington for the next four years.
Investors, alongside people in all corners of the globe, will anxiously wait for insight on the Trump Administrations policies that is sure to have an impact on the global markets. Until then, volatility is expected to continue to send shockwaves throughout markets, thus investors should heed the importance of trading with protective stops with appropriate risk/reward ratios.