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TWELVE o'clock TUESDAY – Stock Market Report

by Robert Holman | The DefensiveAdvisor.com | October 27, 2020


MARKET BULLISH … Rating of 7 (0 - 4 is bearish, 5 is neutral, 6 - 10 is bullish). My view is we are coming off an intra-year correction low. As I stated last week, tech stocks are rallying. Although Monday was not a good day, the market is likely to drift more-or-less sideways/down until the election. In the longer term, the market should be able to move up with passage of a stimulus package. The market will wait-and-see on what the proposals are in a tax-increase package, preferring to ignore campaign rhetoric.


ECONOMICS … There is limited economic news over the last week. Home sales are increasing, and housing starts and permits continue at a steady, strong pre-Covid pace. Overall, the recovery has been quite fast; quicker than most expected. But, the rise in coronavirus cases is causing concern about future economic conditions.

ELECTIONS, VIRUS and STIMULUS – The market was down hard on Monday due to concern over an increase in coronavirus cases to new US highs, raising fears of a shutdown. Under the current Administration, only local shutdowns are planned, and then probably for a month or less. On other days, the market seems to want to advance, probably due to the economic recovery.

No matter who is elected President, the market will probably have a strong upward reaction if … if … if … it appears that a new stimulus bill can be passed quickly.

Both AstraZeneca and Johnson & Johnson have resumed their coronavirus vaccine tests; their results should be in before year end. The new mRNA vaccines from Pfizer and Moderna may not be well received by a Democratic administration, since mRNA vaccines have never (at least not yet) been approved for humans, and are likely to require extensive testing for safety.

FOR NEW CLIENTS – If you would like to learn about becoming a new client of HWM, please allow me the opportunity to serve you. Call me at 972-702-6032 or reply to this email. For those of you who are already clients, thank you for your trust.

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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.

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Last Monday was a scare for so many investors. And in truth, I was closely watching the developments tend throughout the morning and afternoon. We opened down around 300 points, and selling increased