Perceptions of 'reduced tail-risk' fueled frantic fresh French frolicking; a pattern expected if Macron carried the day; with Le Pen behind; but others no-shows as polls suggested. Thus Hollande and opponents are compelled to support the leading centrist candidate; which truly makes it a fight over a two-week period. Early polls now suggest Macron will sweep over 60% but that doesn't take into-account Le Pen's effort to galvanize a broader base (a leaf she's likely taking from Trump's campaign playbook perhaps).

While Macron's dominance is an expected relief to most markets (since he supports maintaining France in the Euro, not simply the EU itself); note that Mecron is essentially 'Center-Right' not simply 'center'. That's essentially a factor in his resignation as Economic Minister under the present (European Socialist) Hollande Government. So while Macron won, this is a degree of movement towards free markets and likely incentive-based new economic growth platforms, which are welcomed by France's private sector.

Neither of these candidates is mainstream politics; and that's largely missed by media simply pointing-out the far-right didn't dominate the vote. So there is a populist (or patriotic) streak in Macron's voters too; which is why many socialists in France's big cities are unhappy; while the majority (including the young) are pleased. It's also why the US market was the most excited ever over a French election result (creator of the EU concept; and 2nd largest of Industrial powers within the EU). The EU may be flawed but markets like it.

Now the market's response is what we expected if he won (essentially the view of his Election being 'in the bag', though it's not over until it's over that's for sure); and the prospects of the US market's response being more than a further knee-jerk reaction, required (still does) follow-through from at least a single other key factor coming forth this week: particularly the 'tax-form' or package outlining it, which needs to be something that seems acceptable.

Amidst all this the market remains at high valuations, saber-rattling from the North Koreans persists, China's President called Trump today to warn about agitating the North even more and you continue to to see macro economic data largely remaining disconnected from the equity Index price levels.

Bottom-line:

Here we are near the top of recent S&P ranges; and given the better behavior of the NASDAQ in recent weeks we're not entirely surprised (and definitely expected upside 'if' the French vote went as it did, with need for more follow-through to make this move remotely sustainable beyond shorter term moves). The North Korean 'flashpoint' continues to merit concerns.