Nov. 9, 2020

WHY STOCKMARKETS ARE GOING CRAZY IN THE US

 
 
 
NOTHING IS SIMPLE.
 
 
 
 
IN THE USA-
 
-The markets were inefficient and did not discount a Biden win correctly.
 
-Corporates expect Biden to raise stimulus spending and thereby give them higher growth.
 
-They do not expect to pay more taxes under Biden or the market would be less effervescent!!!
 
-The USD has declined, making US stocks and oil more attractive/cheaper.
 
- Positive vaccine news is influencing many stocks in the hope of a rapid recovery, especially travel stocks.
 
- NASDAQ stocks that were seen as a safe haven, because they could borrow at zero, are now less interesting and are not following the booming other indices.
 
IN THE UK AND EUROPE-
 
-Stocks are up, but less so.
 
-Investors in the UK, must see the UK surviving Brexit.
 
- Europe sees the same vaccine news and hopes for a return to slower growth than in the US.
 
RISK FACTORS-
 
FOR ALL- failure of vaccines, new strains of virus
 
For the UK-
 
-Stalling, or no trade deals with the EU and US.
 
-Return to violence over Northern Ireland.
 
For the EU-
 
-Internal difficulties, especially over freedom to cross borders for immigrants and complaints about the endless budget hikes remain an issue.
 
- Slower growth is expected, though happiness measures should be used rather than GDP growth.
 
In the UK
Boris would be a big liability in a distant election. We should think of a way more dangerous and capable Rishi Sunak, verses Sir Kier and die hard Corbynistas still squabbling.
 
Meantime, we are personally happy as we just took delivery of these cute little mink from Denmark.
Unfortunately two escaped already and my wife is feeling ill.
 
PURA VIDA!