U.S. equities fell for the ninth consecutive session on Friday — the longest losing streak since 1980 — as investors grow increasingly nervous about the rising odds of Republican Party presidential hopeful Donald Trump over Democratic rival Hillary Clinton.
In the end, the Dow Jones Industrial Average lost 0.2%, the S&P 500 Index gave back 0.2%, the Nasdaq Composite lost 0.2% and the Russell 2000 wafted up 0.6%.
Treasury bonds were stronger across the curve in a haven bid, the dollar was slightly weaker, gold was little changed and oil finished down 1.3% for the ninth decline in the past 10 sessions on reports that disputes between Iran and Saudi Arabia have reappeared, threatening efforts toward a supply freeze agreement.
That boosted the ProShares UltraShort Crude Oil (NYSEARCA:SCO) recommended to Edge subscribers to a gain of 26% since added on Oct. 26 while Edge Pro subscribers are enjoying a 100% gain in their Nov $6 puts against Chesapeake Energy Corporation (NYSE:CHK) recommended on Oct. 27 and a 280% gain in their Nov $11.50 puts against the U.S. Oil Fund LP ETF (NYSEARCA:USO) added on Oct. 25.
Healthcare stocks led the way with a 0.8% gain while consumer staples and energy were the laggards, down 1% and 0.5%, respectively.
GoPro Inc (NASDAQ:GPRO) fell 6.5% after a big Q3 earnings and revenue miss and lowered forward guidance as investors lose patience with the company’s turnaround plans just as new products, including the Hero5 Camera and Karma Drone, launch ahead of the holiday shopping season.
Monster Beverage Corporation (NASDAQ:MNST) fell 3.6% after earnings per share missed estimates by 11% on weaker revenues and margins as global volume growth fell well below expectations.
The October jobs report was largely a non-event: Payrolls rose 161,000, below the 172,000 expected and down from the 191,000 result in September as the unemployment rate fell to 4.9%. The highlight was evidence of wage inflation, with hourly earnings up 2.8% from last year for the best jump since June 2009, bolstering the Federal Reserve’s justification to raise interest rates before the end of the year. Indeed, Atlanta Fed president Lockhart said the report was “solid.”
Back to politics. Which is all anyone seems to care about these days.
Fresh polls show Trump taking the lead in New Hampshire, which could be enough to push him to victory given polling in other battleground states (assuming he gets Nevada, Florida, and Maine’s Second Congressional District).
Overall, the RealClearPolitics average has Clinton with a 1.7-point lead over Trump. That’s down from a 4.6-point advantage last Friday before the FBI announcement that new emails related to Hillary’s private server had been discovered on the laptop of Anthony Wiener, the estranged husband of close aide Huma Abedin.
The IBD/TIPP poll has Clinton up 1 point, while the LA Times/USC poll has Trump up 4 points. The RCP average for battleground states has Clinton up 1.2 points in Florida, 2.6 points in Colorado and 3 points in Pennsylvania. Trump is ahead by 0.8 points in North Carolina, 1.5 points in New Hampshire and 2 points in Nevada.
It’s coming right down to the wire.
Given Trump’s aggressive nationalism and his stated opposition to things like open immigration, “unfair” trade and the Federal Reserve’s cheap money stimulus — all of which have bolstered corporate profits and thus stocks in this bull market — the apprehension on Wall Street is understandable.
But for his supporters on Main Street, this is exactly what’s needed to bolster the middle class.
The selling pressure that’s resulted from Trump’s rise has taken out significant technical support levels. The Dow Jones Industrial Average is falling away from the 18,000 level — first reached in 2014 — that had sustained a tightening trading range Since September. The Russell 2000 small cap index has returned to April-July levels.
Seemingly unstoppable rallies in big-tech glamor stocks like Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) — which pushed the tech-heavy Nasdaq 100 to a new high on Oct. 25 — have given way to the selling pressure as well. AAPL is down nearly 8% over the past two weeks. AMZN is down nearly 11% from its early October high.
Whether this is merely another buying opportunity on the path to ever higher prices or the start of a correction or something worse depends on who the American voters pick to lead the country on Tuesday.
But even a relief rally on a Clinton win could be short lived. The Federal Reserve is preparing to raise interest rates in December, corporate earnings growth is moribund and the economy is limping just above stall speed. Makes you wonder: Why are Trump and Hillary fighting so hard for this job again?
I’m preparing for more weakness with positions such as the VelocityShares 2x VIX (NASDAQ:TVIX), which is up 24% for Edge subscribers.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
