The Northern Star Newsletter 11/5/20 - No Stimulus, Stocks Lag
Will it be Trump or Biden? Will we get a vaccine by December or January or March? Will we see the markets sell off or continue to rally? Will we see accounts set new highs or fall to new lows? Will we see the housing market continue to be crazy or cool off? Will we see a recession or recovery? Will we see a good consumer or poor consumer show up for Christmas?
Why did I begin our newsletter this way you might be asking? I am engaged on a weekly basis by clients through email, webinars and meetings. We comb through copious amounts of articles, opinions, data and details in an attempt to gain clarity and advantage for the clientele we serve. There is never an evening that I am driving home when I am not thinking about a client or two or three, their kids, their debts, their health.
I can honestly say that for about 3 periods in my career, I have never experienced such a difficult and slippery economic time as I feel we are in today. I think this is one of the reasons why we as a firm have always sought more tools, technology and talent over the years to ensure that as times toughened, we can say we have improved in terms of what we offer to those we care for.
Is this time different? Yes of course...no, not really.
Are we going to see the markets prevail? Yes we are. Will you live through yet another recession or two or three? Of course. Will accounts fall and rise and fall and rise? Absolutely. Will you age and retire? Of course.
Your plan is far more important than any particular market cycle or strategy could be. Your contributions to your plan, your steady employment, your good health, your debt reduction strategy are some key pieces to seeing your plan through to its target, which is your needs, your wants and your wishes. Stay focused on what really matters, and it's not the election, COVID or its vaccine, and it's not your returns. It's the growth of your nest egg on trajectory to covering your needs, meeting your wants and accomplishing your wishes.
In our opinion, the battleground states are tightening since we last mentioned a high probability of a Biden win. Could Trump take the election? It is possible but not likely however, we are still inviting that possibility into planning and are prepared.
The selling last week seems to be from a desire to raise cash in the face of uncertainty and not a breakdown in fundamental values. Our experience tells us when asset classes across the board decline despite earnings beats, that is usually a sign of cash raising and profit taking rather than any other reason.
Wall Street on Monday and last week seemed also to be more focused on Covid's impact oversees and our rising case count than the election so we found that quite interesting. Since oversees is reverting to lock-down & quarantine status, it seems legit to pay attention in our opinion.
Till we speak again, enjoy the show, it's bound to be interesting!
No Stimulus, Stocks Lag
WEEKLY UPDATE - NOVEMBER 2, 2020
The Week on Wall Street
Stock prices dropped last week as hopes for a fiscal stimulus bill faded and investors focused on rising COVID-19 infections, here and abroad.
The Dow Jones Industrial Average slid 6.47%, while the Standard & Poor's 500 tumbled 5.64%. The Nasdaq Composite index lost 5.51% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 5.02%.