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The Best of What They Said and I Read Week Ending 11/2/2020

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

  

Barron’s – October 30, 2020 – The Stock Market Succumbed to to the Sum of All Fears – Ben Levisohn

  • “…The Dow Jones Industrial Average tumbled 1833.97 points, or 6.5%, to 26,501.60, while the S&P 500 index dropped 5.6%, to 3269.96, and the Nasdaq Composite fell 5.5%, to 10,911.59.  Pick your worst nightmare, and chances are it had something to do with the market’s worst weekly decline—and its worst month—since March. Fear of catching Covid-19? Cases continued spiking and continue to set daily records. Fear of an unruly presidential election? Polls indicate that the contest between President Donald Trump and former Vice President Joe Biden is as close as ever. Afraid that the economy is heading for another slide? Stimulus appeared dead after the Senate voted to confirm Amy Coney Barrett and went home. Heck, for all we know, the market might even have Samhainophobia, or a fear of Halloween, given the speed that it sold off this past week.”
  •  “…What’s strange is that fundamentally, everything seems to be pretty OK. Jobless claims fell to the lowest level of the crisis, or that third-quarter gross-domestic product, though backward-looking, grew at an annual rate of 33.1%. And on Friday, we learned that personal income grew by 0.9% in September as employers raised wages, that personal spending rose 1.4%, and that the University of Michigan Sentiment index and the Chicago purchasing managers index both topped expectations…Even corporate earnings suggest that conditions have gotten better—and should continue to get better…with 60% of companies in the S&P 500 having reported earnings, companies have been beating at an 81% clip. While earnings are down 12.5% from a year ago, that’s nine percentage points better than predicted at the start of reporting season…Guidance has been good enough for analysts to maintain their outlook for double-digit growth in 2021.”

 

 U.S. Global Investors – October 23, 2020 – Frank Holmes

  • “…Although the S&P 500 Index is trading near historic highs, all might not be well with the market. Bloomberg reports that through the third quarter, 25 companies in the index reported liabilities exceeding assets, the most in 25 years. This is more than double the high of 12 companies with negative equities during the Great Recession.”
  •  “…U.S. households boosted spending for a fifth straight month, helping the economy climb further out of the deep hole created by the pandemic. The Commerce Department said personal-consumption expenditures rose 1.4 percent last month. Consumers have increased spending since the summer, although the pace of gains slowed into early fall. Personal income was up last 0.9 percent month, after a sharp decline in August, rising on higher pay and remaining pandemic-related aid.”
  •  “…Year-to-date, Chinese stocks have outperformed its global peers and this trend may continue. China not only managed to avoid a recession this year but actually sees its gross domestic product (GDP) growing 1.6 percent in 2020 while the world economy is expected to decline by 4.4 percent…The pandemic has led to a decline in individual wealth, yet household wealth largely held up and even increased in China and India, Bloomberg reported. Household wealth in China grew 4.4 percent in the first half of the year and 1.6 percent in India. China benefited from reopening its economy quickly and ongoing government support to stimulate economic recovery.”  
  •  “…China increased buying U.S. farm products last month but remains well behind the schedule to get to a planned $140 billion of U.S. goods this year. As of September 30, China has purchased only $58.8 billion in goods covered by the agreement. Purchases should have reached $108 billion by that time to be on track toward the full-year target.”

 

Bloomberg – October 30, 2020 – You’re Stressing Out About the Election All Wrong – James Tarmy

  • “…Election-related stress levels are rising across the U.S…The good news for about 50% of the country is that this will all be over soon, the bad news for the other half is … this will all be over soon.  Bloomberg spoke to health professionals about ways in which average, harried, news-obsessed readers can stay sane up to and after Nov. 3., with wellness tips to handle whatever comes next.”
  •  “…Very few American adults will remain sober on Tuesday night. That, Edelson says, is both understandable and unavoidable—not to mention the continuing Covid-19 pandemic…Edelson advises to keep it all in perspective: “Whatever you eat on election night doesn’t affect your health as a whole,” she says. “Do what you need to do to survive—and drink some water.”
  •  “…People need to understand that watching poll results for seven hours is exhausting. “This isn’t just staying up to watch the NBA finals on the West Coast,” he says. “This is something that people have a much bigger investment in, and it’s liable to be somewhat more fatiguing.”  By taking Wednesday off in advance, Lundquist continues, people can eliminate the pressure of going to bed anxious, knowing they have to wake up and function at jobs just a few hours later. “If you’re someone who thinks [that combination] is going to mess you up, you need to make room for it.”

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