TWELVE o’clock TUESDAY – Stock Market Report
by Robert Holman | The DefensiveAdvisor.com | October 6, 2020
NEUTRAL … Rating of 5 (0 - 4 is bearish, 5 is neutral, 6 - 10 is bullish). While I’ve considered moving to a 6 rating because the market appears to have bottomed on 9/24, it just doesn’t seem prudent. We added a position but still have cash reserves. There are always stocks that can be bought at advantageous prices.
ECONOMICS … Many key economic series are increasing but the pace of recovery is slowing. Hence, the focus on a stimulus package to speed things up.
STIMULUS … Each time, as rumors circulated that a bi-partisan stimulus agreement is just around the corner, the market responded positively. Apparently some progress toward an agreement has been made. Should this occur, the market will probably rally strongly.
MARKETS … As suggested in my last letter --- “if the markets have bottomed ... it was a -8.0% price decline for the DJIA ... pretty typical for an intra-year correction” --- the market does appear to have bottomed on 9/24. Generally, the post-correction market seems to be tracking the economy.
The market does not seem to be responding to shifting polls, debates, or candidate actions, at least not in the way I thought it would. Biden seems to be in the lead, and it may be increasing. It seems like his tax policies – unfavorable to corporate earnings – would take the market down. But so far, the market has not reacted that way. I’m trying to reconcile the price action with my thought processes.
I’m not the one who coined the phrase “the business of America is business” but it is so true. We are going to need inventive policies to bring back the businesses that closed permanently.
If you are not a current client, please allow me the opportunity to serve you. For more information, visit http://www.defensiveadvisor.com/blog
Opinions voiced in this post are for general information only and are not intended to provide specific advice or recommendations for any individual, without complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Past performance does not guarantee future results.
#StockMarketInvestmentLetter • #InvestmentManager • #IndependentFinancialAdvisor
Comentarios