We have some bad news for Democrats: according to a new note published by Goldman's trading desk (and available to pro subscribers in the usual place), "on June 28th, the day following the debate, the market priced in a Trump victory and a Republican sweep."
As Goldman thematic trader Louis Miller writes, the bank's Republican Policy Outperformers vs Underperformers pair (GSP24REP) was up +4.51 std dev and the Democratic Policy Outperformers vs Underperformers pair (GSP24DEM) was down -3.78 std dev (vs YTD).
The Goldman trader highlights similarities between the market’s reaction post the debate as well as 2016’s election week: both the Size factor and the Staples/Utilities sectors underperformed on June 28th as well as during the election week in 2016, while the Value factor and Financials outperformed during the same time periods.
