What Happened In the Week Ended October 30, 2020:
Heading into the U.S. elections, the stock market neglected favourable earnings reports which were generally above analysts’ estimates and economic and monetary prints which beat expectations by a large margin. The U.S. surprise index is presently 126. Unless the spike in the coronavirus caseload suddenly brings unwanted lockdowns, the upward direction of the economy will be maintained. Yet, the S&P 500 lost 5.8% this week, closing at 3270—that is 8.7% off the September 2 all-time high of 3580. Traders decided to close overextended positions. Why? There are stark policy contrasts advocated by the Republicans and the Democrats. The key issues are Taxation, Foreign Relations, Regulations, Infrastructure and Energy. The direct consequences of their strategic plans in these areas could violently whiplash the market.
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By Hubert Marleau
By Hubert Marleau