Dow: +305.45 +3.28%
NASDAQ: +53.79 +3.12%
S&P500: +39.45 +4.08%
At the end of the trading day I think I actually heard a collective sigh of relief as the markets closed with the largest gains on an election day. Today not only marks a historic day in politics but also as a potential turning point for the economy with the deviation from the current affairs of the Bush Administration.
The surprising aspect is that even though Barack Obama is the front runner with his higher taxes and the probable Democratic control of congress, the markets rallied 15 percent in the week prior to the election. Breaking away from conventional wisdom of low taxes and a Republican congress it seems as though investors are seeing dollar signs in change.
Crude oil for October delivery ended the trading day at $70.53 per barrel, up 10.36%. This is the fourth largest gain for the commodity in its history dating back to 1983.
The big oil names rode this gain all the way to the bank. Among the big gainers was Brazil Petrobras, or Petroleo Brasileiro SA, [NYSE:PBR] who saw a 16% gain today. This also comes on the news that PBR set a record for monthly oil exports in October and the signing of an oil exploration deal with Cuba's Companhia Cubana de Petroleo a few days ago.
In other commodity news, almost everything was up on the day except the US dollar which shed 2.2350 points down to 84.75. Basic material stocks reflected these gains in their prices.
On the earnings front, Archer Daniels Midland [ADM], ethanol producer and the worlds largest producer of high-fructose corn syrup, soared on better than expected earnings. ADM reported a net income of $1.05 billion, or $1.63 per share. Analysts on average were expecting earnings of 69 cents per share, according to Reuters Estimates.
I would take today as a legitimate sign of some confidence returning to the markets or at least the American government. There are a lot of cheap stocks out there and ones that are paying good dividends. I would be cautious and don't dive right in but it would be wise to plan entrance/exit strategies for these beaten down stocks if you haven't already.
Don't forget to vote and go Bulls, they're on ESPN2 tonight... even though no one will be watching that.
Keep Trading,
Justin Kruger
Stock Market Club
