What now?

As I write these words, there is pandemonium in the markets. ES futures are down about 4%. My 16 year-old (Canadian) daughter received an offer of marriage over the internet from an American.

I recognize that a lot of people view a Trump presidency with horror, but it's time to assess the investment implications of these electoral results. Arguably, fear levels have already spiked and any panic selling could be viewed as a buying opportunity for stocks. As the chart below shows, the CBOE put/call ratio (middle panel) spiked to 1.48 yesterday and the VIX term structure inverted. These are readings consistent with short-term bottoms rather than the start of a sustained bear leg.

So let's take a deep breath and review the bull and bear case for equities under a Trump administration.

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