Home About Archives RSS Feed

@theMarket: Politicians Play Cat & Mouse With Investors

By Bill SchmickiBerkshires columnist
It was a week of will they, or won't they. Both parties claimed to want another stimulus deal done before the election, but the proof is in the pudding and as of Friday, the plate is empty.
Investors may be coming to the conclusion that the latest negotiations between the Democrats, led by House Speaker Nancy Pelosi, and Republican U.S. Treasury Secretary Stephen Mnuchin, and White House Chief of Staff Mark Meadows, was simply an election ploy. A way to set up the other side for failure, while making their own position look both caring and, at the same time, blameless. Both sides already knew that the GOP-controlled Senate had no appetite for another bail-out that was any higher than $500 billion.
In any case, the markets have been living on "hopium" all week in anticipation that something might get done. I suspect that if there were to be a deal, most traders might "sell the news" at this point. The thinking is that in order to pass a pre-election fiscal package with only 11 days to go before the election, it would need to be so watered down that its impact on the economy would be minimal, and too late to deal with what will probably come next. Will it be a "dark winter," as Vice President Joe Biden warned in Thursday night's presidential debate?
Cooler temperatures are almost upon us, while the number of coronavirus cases continues to grow. Today we have been told that there are 77,000 new coronavirus cases in the U.S., which makes that the highest level since the beginning of this pandemic. That places the U.S. in an extremely perilous situation health-wise, according to just about every medical expert in the nation. Investors are worried that the doctors may be right, and that we are not "rounding the corner" as claimed by one of the presidential candidates.  In which case, we could be headed for a reversal in economic growth that could sink the markets and the economy
For clues, investors are watching COVID-19 events in Europe, as I wrote last week. Europe appears to be a few weeks ahead of us in its increase of coronavirus cases. I listed some of the economic disruptions that this new surge was creating in places such as France, Germany, and the UK.
This week, that wave of infections continued to rise with at least 10 nations reporting record COVID-19 case numbers. Poland just announced that they are planning to all but shut-down their economy once again. The number of those hospitalized has reached the point where authorities are worried that they are facing a shortage of trained medical staff. The same situation could happen here in the United States.
In the meantime, the markets are uber-focused on the elections and the stimulus. By the look of what sectors are doing best in this choppy market (infrastructure, materials, alternative energy, China, and other emerging markets), it seems that investors are still expecting a blue wave to sweep the country. As for stimulus hopes, I fear nothing will come of it. Even if an agreement is reached by some miracle, it would probably not be voted on before the elections. In which case, I question whether anything would pass afterward in a lame-duck session of Congress.
Bill's forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by OPI. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Adams Animal Rescue to Host Fundraiser for 'Roxy'
North Adams Hosts Menorah Lighting on Sunday
MDAR Commissioner Marks 'Green Friday' at Seekonk Tree Farm
Small Business Saturday in the Berkshires
Brian Horan Joins Cain Hibbard's Litigation Group
Winter Weather Advisory for Northern Berkshire; Snow on the Way
North Adams Council Declines to Make Airport Commission Retroactive
Clarksburg School Advocates: Gradual Repairs Show Town's Dedication to Building
Berkshire Money Management opens Great Barrington office
Hoosac Valley Kindergarteners on 'How to Cook a Turkey'

@theMarket (390)
Independent Investor (451)
Retired Investor (68)
November 2021 (7)
November 2020 (1)
October 2021 (8)
September 2021 (9)
August 2021 (6)
July 2021 (8)
June 2021 (6)
May 2021 (6)
April 2021 (9)
March 2021 (8)
February 2021 (8)
January 2021 (5)
December 2020 (6)
Wall Street Oil Europe Crisis Debt Ceiling Taxes Deficit Japan Stimulus Europe Interest Rates Congress Selloff Markets Rally Stocks Recession Housing Currency Euro Election Jobs Stock Market Commodities Pullback Banks Debt Metals Retirement Energy Federal Reserve Greece Bailout Fiscal Cliff Economy
Popular Entries:
The Independent Investor: Don't Fight the Fed
Independent Investor: Europe's Banking Crisis
@theMarket: A Week to Forget
The Retired Investor: The Teacher Shortage
@theMarket: The Bottom Is In
@theMarket: One Down, One to Go
@theMarket: Corrections Are Good for the Soul
@theMarket: 707 Days
@theMarket: Let the Good Times Roll
@theMarket: This Is the Year for Commodities
Recent Entries:
The Retired Investor: Thanksgiving Post-Pandemic
@theMarket: Market's Week of Indecision
The Retired Investor: The Teacher Shortage
@theMarket: Annual Inflation Hits 30-year Highs
The Retired Investor: SALT Away?
The Retired Investor: Vicious Cycle Between Energy & Food Prices
@theMarket: Markets Get a Green Light
@theMarket: Good Earnings Support Markets
The Retired Investor: The Billionaire Tax That Wasn't
@theMarket: Stocks Are Signaling an All-Clear