How a 12-hour market thrill ride unfolded after Trump’s victory

Sleep was forgotten, prayers invoked and vodka drunk as markets ricocheted along a wild rollercoaster.

The roller coaster ride spawned winners, losers and more than a little heartburn in trading centers world-wide.

As Americans headed to the polls on Tuesday morning, local time, sales staff at Deutsche Bank’s London offices circulated a lighthearted message on their terminals to gauge the chances they’d be able to turn in early that night.

“If Clinton wins Florida, GO TO SLEEP. If she wins Georgia, definitely GO TO SLEEP,” the message said. If Donald Trump were to win Pennsylvania and Michigan, which the message described as “both leaning to Clinton,” then “GET READY FOR WORK.”

By early Wednesday morning US time, Mr Trump had captured at least three of the four states in route to a stunning presidential victory that shook the political establishment to its core and sent shock waves through global markets.

Over a 12-hour period, markets for stocks, bonds, currencies and commodities plunged before ricocheting back toward all-time highs. The roller coaster ride spawned winners, losers and more than a little heartburn in trading centers world-wide. And while Wednesday ended on a bullish note, the turbulence is likely to continue as the particulars of Mr Trump’s administration and agenda come into focus.

In the US, stock futures tumbled nearly 900 points overnight before the Dow Jones Industrial Average rallied to close near a record high. Brent crude oil, meanwhile, initially fell more than 3 per cent before rising nearly 1 per cent. Gold prices shot up 5 per cent before retreating to be roughly unchanged on the day.

The following is an hour-by-hour account of how the US elections whipsawed the markets. Unless otherwise indicated, times are for the American East Coast.

7:00 pm

Ray Attrill, the Sydney-based global head of currency strategy at National Australia Bank, stepped away from his computer screens to get lunch. When he returned 20 minutes later, he was stunned to see the US electoral map glowing red and currencies like the Mexican peso in sharp decline. “Brexit, Trump coming to a country near you,” he said.

7:30 pm

In Hong Kong, traders at Parry International Trading had been at their desks since 6 a.m. local time to track the markets. Mounted televisions blasted the news across the trading floor as the state results rolled in. Japan’s Nikkei Stock Average, a regional bellwether, began to slide.

Gavin Parry, the firm’s managing director, was surprised but not shocked. Traders remained in good spirits, even as markets started to swoon. “The joke on the desk was basically 2016 is the year to bet on the underdog,” Mr Parry said. “You have Leicester City winning soccer, you have the Cubs win, you have Ireland beating New Zealand [in rugby] for the first time in 115 years this weekend, and now you’ve got Trump!”

8:30 pm

David Kotok, chief investment officer at Cumberland Advisors in Sarasota, Florida, was watching results roll in from the comfort of his home library. As Mr Trump’s results looked stronger and stronger, Mr Kotok’s phone started buzzing with a flood of text messages from clients asking what they should do. As the night progressed, his advice grew simpler: “You should probably get some sleep.” Nobody knew what the next day held in store.

9 pm

Mark Dowding, co-head of investment-grade debt at BlueBay Asset Management, woke up at 2 a.m. in London to check the election results. He had planned to return to bed. But when he saw Mr Trump had clinched key swing states, “sleep was off the agenda,” he said.

Two hours later, Mr Dowding headed to his local railway station on the northern outskirts of London. The train failed to show and Mr Dowding ended up crowding into a taxi with a group of other finance professionals. “Everyone was tapping away on their phones” during the hour-long ride into the capital, he said.

John Hardy, a Texan who works on the London trading floor of Saxo Bank as head of foreign-exchange strategy, spent the night in the office. As he surveyed exit polls and early-voting data, he concluded Mrs Clinton’s swelling deficit was too great to overcome. At 2.37 a.m., hours before major US TV networks called the race for Mr Trump, Mr Hardy sent a message to other traders via the bank’s internal chat: “Trump wins it.”

A response came back: “That’s crazy.”

A continent away, in Newport Beach, California, Pimco’s chief investment officer, Dan Ivascyn, left the office around 6 pm local time. That didn’t mean he was calling it a night. As bond markets started swinging as early results pointed to a possible Trump victory, Mr Ivascyn instructed his traders to use the after-hour gyrations to buy up bargains in bond and currency markets.

Pimco might have been anxious about trying to catch a falling knife, but Mr Ivascyn had in mind the relatively swift rebound that took place in the UK following the June vote to leave the European Union. “Pimco expects these bouts of volatility to be ongoing and was looking to take advantage of last evening’s volatility,” Mr Ivascyn said.

9:35 pm

In San Antonio, the head of a little-known data analytics team sent a flurry of messages to the Trump campaign’s New York war room. The firm, Cambridge Analytica, had designed complex election-predicting algorithms, and they had just tilted in Mr Trump’s favor.

Cambridge, part-funded by Robert Mercer, a computer scientist and co-CEO of secretive quantitative hedge fund Renaissance Technologies, has been a pivotal behind-the-scenes force working to elect Mr Trump. The firm’s 12-person team used sentiment analysis to see whether potential voters were more receptive to positive or negative advertising, which helped drive the high-stakes tone of the Trump campaign.

Now, a couple hours after polls closed, data were pouring in from roughly 300 battleground counties. Quickly, Florida became the center of attention, as rural counties in northern and central Florida started to show a strong skew toward Trump.

“We were just zoned into Florida for a long time,” said Matthew Oczkowski, Cambridge’s head of product. “As soon as we saw those counties start coming in, we knew it could happen. We knew the odds were more than 50 per cent.”

10 pm

At a results-watching party at a hedge-fund trader’s loft apartment in Manhattan’s Soho neighborhood, golden “USA” balloons were affixed to the floor-to-ceiling windows. The mood started off jovial. But as early results pointed to an increasingly likely Trump victory, traders there were glued to their phones, which showed stock futures plunging.

Instead of drinking wine and chatting with other attendees, they paced the apartment, with some placing bearish futures trades from their phones, anticipating chaos in the markets due to the unexpected results.

As markets kept souring, partygoers filtered out to either get a few hours’ sleep or to hail Uber cars to take them straight to their Midtown offices to brace for what looked like a wave of carnage.

10:30 pm

Andrew Beal was loving it. The prominent banker, one of Donald Trump’s first public backers in finance, spent the evening at Mr Trump’s celebration in a midtown Manhattan hotel. Mr Beal, who founded Dallas-based Beal Bank, helped set up a super PAC backing Mr Trump and is on his economic advisory team. He walked across Midtown to the event with a group of fellow supporters. They made a pit stop to buy Trump buttons from a street vendor.

The mood at the event had turned positive early on. As he sipped vodka and sodas, Mr Beal, a noted math whiz, eventually evaluated the returns and gauged that his candidate was going win before Florida was called for Mr Trump. “This election is over,” he jubilantly predicted to anyone who would listen.

11:30 pm

Investors and companies seemed to be panicking. At Cambridge Global Payments, which manages currency risks for companies, traders’ phones were ringing off the hook with calls from antsy corporate executives who were watching the violent gyrations in global foreign-exchange markets. “There was a wave of treasurers and CFOs calling in and saying ‘we need to make sure we’re stable for the evening,’” said Karl Schamotta, the Toronto firm’s head of enterprise risk.

The panic crested shortly after 11 pm, and some semblance of stability crept back into the vast currency markets. The Canadian dollar and Mexican peso began to bounce back relative to the US dollar, prompting some Canadian and Mexican firms with operations in the US to take “opportunistic” actions such as selling the dollar and buying back their own currencies.

11:45 pm

Kevin Daly, a fund manager at Aberdeen Asset Management, woke up at 4:45 a.m. in London and turned on the TV. He was wearing his pajamas when Mr Trump was crowned winner of Florida and Ohio. “I had to pinch myself a couple of times because of what I was seeing,” Mr Daly said. Still in disbelief, he checked dozens of emails he had received overnight from colleagues all over the world. “I needed a second source,” he said.

Mr Daly showered, changed and then went to wake his six-year-old son. “He won,” Mr Daly told his son. “He had me repeat it. Twice.”

1 am

Pennsylvania had just been called for Mr Trump. It was early morning in London, and Graham Sharpe, a director at bookmakers William Hill PLC, realised his industry had once again made an awful wager. British gambling houses had been swamped with votes anticipating a Trump victory, and now they were on the hook for huge payouts.

“Bloody awful,” he said, listening to the results come in over the radio from his northwest London home. “It was like deja vu,” he said, referring to the Brexit vote, which cost William Hill about £400,000. After estimating Mr Trump’s chances of winning the presidency at around 20 per cent, they are set to lose around £250,000 more.

One of those winners was John Mappin, who won £110,000 after placing 35 bets on a Trump victory. Mr Mappin spent election night at the vast Victorian hotel he owns in Cornwall, southern England, surrounded by computer screens. Mr Mappin placed the bets based on the results of a predictive algorithm he designed. He spent Tuesday night working on mathematical formulas while eating large quantities of chicken consommé.

2 am

Robert Murray, a prominent Trump backer and the controlling owner of the nation’s largest privately held coal miner, had turned down perhaps two dozen invitations to election-watching parties, instead opting to be at his home in Ohio’s Appalachian foothills. By 2 a.m., with Mr Trump on the brink of victory, the 76-year-old had turned to prayer, keeping in mind tales of Biblical characters who were imperfect but used by God for good.

God “didn’t pick saints to carry out his will,” Mr Murray said. “He picked people who were rough around the edges and tarnished to carry out his will. That’s Donald Trump.”

3 am

President-elect Trump declared victory. Bob Doll, chief equity strategist with Nuveen Asset Management, had predicted back in January that any Republican nominee would win and that the GOP would control both houses of Congress. He expected that markets would tank as much as 5 per cent if his predictions came true. Now that seemed to be happening.

Mr Doll was poised to pounce, preferring “to be a buyer when other people are running for the hills.” But the buying opportunities never materialised. Mr Trump’s conciliatory victory speech seemed to calm the fears of traders. Stock indexes recovered much of their losses. In the coming hours, as the bounce grew more pronounced, Mr Doll would decide it was time to sell. He was looking to trim his holdings of some health-care stocks that had surged on Mr Trump’s victory and on the defeat of a California ballot initiative that was viewed as hurting the industry.

“Is Pfizer 9 per cent better today than it was yesterday?” he asked. The answer, he reckoned, was no.

4 am

Emails kept landing in Karen Altfest’s inbox. The executive vice president of Altfest Personal Wealth Management in New York had turned her TV off seven hours earlier, unable to stomach the sight of another commentator “stand over another map.” Stunned by Mr Trump’s upset win, she tried to calm herself by reading the arts and style sections of a few newspapers.

By dawn on Wednesday, she was getting emails from similarly sober clients. Many were asking about buying opportunities. “I was very proud of them for taking the long-term view,” she says. Few were looking to sell.

Her message to clients: “Things will be all right and these things have a way of working out,” she says.

4:30 am

Scot Vorse was at home in Los Angeles when his cellphone rang. The 56-year-old former Goldman Sachs Group Inc. investment banker is a longtime friend of Mr Trump’s campaign chief executive Stephen Bannon. Now, as he anxiously watched results trickle in with his son, Mr Vorse was reminded of the times he worked alongside Mr Bannon on mergers and how his friend’s intense focus helped get deals done.

It had been more than an hour since Mr Trump had declared victory, and Mr Vorse had turned in for the night. His phone woke him up. It was Mr Bannon calling from New York.

“You guys did it!” Mr Vorse exclaimed.

“It’s pretty crazy,” Mr Bannon replied.

6 am

Justin Wiggs, managing director in equity trading at Stifel Nicolaus, arrived at his Baltimore office, expecting chaos. To his surprise, things were calm. Trading was orderly. Stock futures, which had fallen by as much as 5 per cent, were now trading down roughly 1.5 per cent ahead of the market open.

“Would you think I was crazy to think the market might be up today?” one client asked him in an early-morning phone call.

7:30 am

Morgan Harting’s eight-person team squeezed into his office. The group of portfolio managers at AllianceBernstein’s emerging-markets group, had been in the office until 2 a.m. and reconvened four hours later. Now they were scrambling to figure out how to position for when markets opened.

Mr Harting’s advice: “Don’t stare at the screen, take a moment” to think. They filled a white board with expected winners and losers. Potential winners included coal companies and gun makers. There were lots of question marks, including the potential geopolitical implications. “The last 24 hours have been humbling,” Mr Harting said. “The market and the forecasts got this wrong.”

9:30 am

“And we’re up!”

About a dozen traders at JonesTrading Institutional Services had spent the morning trying to talk down jittery clients on the phone ahead of the stock market open. The firm’s global market strategist, Yousef Abbasi, had been fielding calls about how to position for Mr Trump’s expected policies. Private-prison companies’ shares are suddenly popular. Coal shares should be up, renewable energy down. “You’re talking about a whole new regime here,” he said.

Now Mr Abbasi was surprised to see the Dow Jones Industrial Average get off to a fast start -- a stunning reversal after looking like it was due to plunge just hours earlier. “That was quick,” he exclaimed.

Phones started ringing across the trading floor. “We are making America great again,” someone on the floor quipped, as United States Steel Corp.’s stock jumped higher. “Steel is definitely in the wall,” another trader said with a smile.

“Why is Smith & Wesson down 12 per cent today?” shouted another trader across the room.

“Because you don’t need to buy your gun today,” Mr Abbasi replied. “The dust has settled and people are jumping in.”

Dow Jones