Record highs in Covid cases across the glob has driven the Oil prices lower by 5% in the pre-market. Stock futures as well as Gold are in reds. Bitcoin however reach its 52 weeks high.
Although Microsoft reported yet another revenue climb, the 13th one in a row, mainly because of surge in work from home and online services such as Azure, but their pre-market shares slipped lower.
An American non-profit org. has an unbiased test report on Tesla's self-driving capability and it's not good. According to this report, self-driving suite worked inconsistently, specially Auto-park self-parking system. Also, they emphasized on the fact that, this system requires significant driver's attention to reduce safety risks.
There is a similar time that I haven't seen anyone comparing this election with it. I'm talking about the second round of George Bush's election in 2004. The election became messy and resulted in a recount of votes in Florida. Although Bush won that election but a lot of things were the same as now regarding the stock market. We have the pandemic today, but back then we had the 9/11 which followed by the attack of US on Afghanistan and Iraq in 2001 and 2003 respectively.
From the market perspective, when Bush started his presidency in 2000 NASDAQ was about 5000. The market initiated a meltdown and those figures weren't seen until mid 2015; closer to the end of Obama's administration. However, the point of interest for me is 2004 which has a lot of resemblance with the current market. In Jan 2004 NASDAQ reached 2100 and for the next 8 months fell down to 1700 range.You can find a similar behavior in Dow Jones and S&P as well. However this drop isn't that significant when you see the highs and lows in the span of 3 years (2001 - 2004).
Based on this historical data and current circumstances, it seems that we'll experience the same situation and probably the market peak would be around the time when the stimulus package is announced. After that we could hit a decline, all the way into mid Jun.
And I think this could happen irrespective of which president will be elected. If Trump resumes, that will mean no change. We'll be on the same path and mind set as we have been which won't be good for the market, in short term at least, because the handling of the pandemic and negotiations with China are going to be no different than what they were. If Biden wins, there will be a minimal boost at the beginning by hoping that he could address those two issues, however, recovering from the mess Trump will leave him with will soon become a reality which at the end of the day won't make much difference in terms of the market or even the economy for that matter.
Let me know what you think.
Keep smiling and stay charitable.
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