12:00 TUESDAY #312 – 11/4/26
INVESTMENT INSIGHTS by Robert Holman, CFA CFP®
THE BIG PICTURE - STOCK MARKET RATING …
· Bullish/Bearish Rating: 7.0 (1 - 4 is bearish, 5 is neutral, 6 - 9 is bullish).
· Market/Economic Condition: Market, responding to mid-term election results
· Outlook: May be improving, as response to widespread concerns is called for
Well, I held back this letter one day to see election results, and last night they exploded in a wave of dissatisfaction with the President and his inability to speak to voices of dissatisfaction with any level of real empathy.
While he touted his successes, and they were significant, he only defended and explained his policies. He was unable to express real sympathy for the concerns of the common man – budgetary issues like oil, food and electricity prices and to top off the list, realization that retirement savings are now inadequate for future needs. His aloofness frustrated many.
Speaking like a teacher lecturing on supply and demand, or the role of the US as enforcer and peacemaker, and so forth was not what people wanted to hear. He did not articulate that he understood what people were going through, what they were dealing with.
Votes from blacks and Hispanics that won him the Presidency disappeared. In short, he did not relate to the public at all. He didn’t just get bitten in the butt, he was attacked by a Great White that took an enormous chunk out of his backside.
Anyone opposing him was elected, no matter what their beliefs. It was not progressivism versus conservativism. It was not a “better platform” election; it was a “throw them out” election, again, due to deep frustration. Anyone offering to reduce anything was elected.
Incumbents lost their positions in a sweeping change of fortune. Not one political office was changed from Democrat to Republican, as Democrats gained seven Senators, seats in at least 25 House districts, and five governor races. Final score (almost) Democrats 37, Republicans 0.
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Last week, we saw pronounced volatility in the markets. Widespread concerns about inflation, interest rates, oil prices, job creation, and economic growth are prompting investors to reassess earlier assumptions. As each news release comes along, investors must now consider whether a broader shift is underway.
The Dow 30 chart suggested the index might be about to roll over until a new uptrend started forming at the beginning of October. Last week was a back-slipping, to be sure. Today’ strong rally in reaction to yesterday’s election results is too soon to determine with conviction the exact direction the market will take from here.
The Texas Senate race went as most (all but an unfortunate few) anticipated it would. The surprise is Texas has a new governor. I must confess that I did not think she could win, so I did not know much about her. So, I spent last night researching what she stands for; what she believes in. For those interested in starting to get to know a bit about her, my notes on that subject are posted after the final comments on this week’s letter.
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Opinions in this post are for general information only and are not intended to provide specific advice to, or recommendations for, any individual without our complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Nor does past performance guarantee future results.
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My notes from last night:
Texas Governor, Gina Hinojosa, throughout the campaign sought to
Tie Abbott to Trump, whose job approval ratings have steadily declined and now sit at an all-time low.
Speak to persistently high inflation driven by Trump’s tariffs and his war on Iran
To highlight brutality of Immigration and Custom Enforcement’s mass deportations.
She capitalized on Texans’ bipartisan concerns about
o Data centers,
o School vouchers,
o State takeovers of public school districts --
o All of which had been championed by Abbott.
She also wants to
Save Texas Public Schools
o Elimination of the STAAR Test
o Ending handing-out grades A through F for public schools
o Sending taken-over school districts back to their communities
o Appointing an educator to head the Texas Education Agency
o Raising teacher pay to be amongst the highest in the nation
Put money in your Pocket
o Issue one-time $1,500 refund checks to every household in Texas to be paid from the $27B increase in the rainy-day fund
o Lower our grocery bills by banning predatory price gouging with surveillance pricing, stopping algorithms to charging different prices for the same food
o Stop private equity firms from buying up residential housing, to keep home ownership to individuals
o Quality health care for children
o Banning bad-faith health care denials
o Cut property taxes by ending corporate subsidies
Slow down or temporarily halt Data Centers (reminds me of fracking debate)
o Direct the PUC to freeze electricity rates that residential customers pay
o Place an immediate moratorium on data centers
o Put real legislative protections in place for consumers that end huge tax breaks in the form of multi-year tax exemptions for building new facilities of all types, not just data centers
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