The Wrap: GOP Suffers 'Extinction Event,' Tech Drops Hard, Gold Soars
November 6, 2026 | In this edition of The Institutional Risk Analyst, we provide a special post-election setup for the latest episode of “The Wrap” with Chris Whalen” hosted by Julia LaRoche and ponder the week of striking news developments from Washington & Wall Street. We spoke to Remy Blaire of FinTech TV from the NYSE this week.
Election Wipeout: We see three key factors behind the stunning electoral rebuke of President Donald Trump and the MAGA Republicans: 1) affordability and the Iran war, 2) the vicious immigration policies championed by Steven Millar which alienated the Latino vote and 3) a complete abandonment of traditional Republican positions of pro-business and fiscal responsibility.
Florida Governor Ron DeSantis said the blue wave that swept over the US on Election Day was akin to a “meteor strike” for the Republican Party,” Bloomberg News reports. “DeSantis predicted the heavy losses suffered by the GOP will take many years to recover from, calling it an ‘extinction level event’ for Republicans in many parts of the country.” Summary from Capital Alpha Partners below:
One of the original members of the House Freedom Caucus made his decision on who to support in 2028 after Republicans' historic losses in the midterms. Representative Marlin Stutzman, R-Ind., told Fox News Digital "I am all in" for Secretary of State Marco Rubio and called on fellow Republicans to begin thinking about how to rebuild in the wake of their election losses. "He can be a unifier," Stutzman said.
Stock Market: Stocks rallied immediately after the election, but chip stocks plummeted Thursday leading the Nasdaq lower by 5.5%. Nvidia (NVDA -9%), Intel (INTC -10%), AMD (AMD -17%), and Micron (MU -17%). Other Big Tech giants: Microsoft (MSFT -3.5%), Alphabet (GOOG -3%), Tesla (TSLA -10%), Apple (AAPL -1%). In other words, like we sait this week, the larger hyperscalers with stronger credit faired better.
Given the scope of the political reset this week and complete lack of visibility on different sectors of the economy, we view energy as still the most attractive area for investment because neither political party in the US nor politicians elsewhere are in any position to do anything about the price of energy and related areas such as food and consumer goods. Bonds and financials may also benefit from the ongoing rout in AI and technology stocks.
Affordability: While Democrats are congratulating themselves on the election win, they inherit the issue of affordability from housing to energy to food. The U.S. annual inflation rate stands at 3.7% (according to recent data from the United States Inflation Rate), remaining almost twice the Federal Reserve's target rate of 2%.
Meanwhile, The US Energy Information Agency Administration (EIA) data showed that, as of Friday October 30, 2026, US diesel / distillate storage had dropped into the zone at and below which local outages could be expected to start. Much of remaining storage represents distillate liquids in transit and tank minimum storage requirements.
Housing Finance: “Aggregate mortgage applications fell 1.2 last week, with refis increasing 0.1% and purchase volumes falling 2.0%,” writes Brean. “Primary rates were 7bps lower at 7.30% according to the MBA. This puts rates about 1/4-3/8 of a point below their recent highs, but still well above levels that would be needed to spark any kind of refi activity. We would need to see a sub-6.50% rate for that, which would equate to a 4.10% 10yr note (not even close to our base case). We continue to view these small week-over/week moves as being more noise than any real change in borrower behavior…”
Private Credit: The U.S. private credit default rate reached a record high of 6.3% for the trailing 12 months, according to Fitch Ratings. This increase is driven by elevated real interest rates, quiet restructurings, and liability management exercises. Approximately 88% of default events stem from soft restructuring mechanisms like interest deferrals, payment-in-kind introductions, and stressed maturity extensions.
Precious Metals: Gold pushed back above $4,100 per ounce and silver reclaimed the $52–$53 range over the past five trading days. According to The Kobeissi Letter, gold and silver added a combined $1 trillion in market capitalization on Wednesday.
Economist Peter Schiff said in a post on X, "After being up over $130 today, gold is up another $55 tonight, trading above $4,100. It's possible it may never trade below $4,000 again. Silver is up another 40 cents, trading above $52.50. It may never trade below $50 again. Just in case, buy both now."
Further Reading
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