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Greetings from the abandoned courtyard of the Computer History Museum. It is nighttime, and I’m by myself (since no one else is lunatic enough to be out here). In fact, I just remembered I actually did a video tour of this museum years ago. Lots of memories here!
Anyway, that’s not what this post is about. I just wanted to bang out a few words about some key ETFs in this nail-biter of a week.
First up is commodities, by way of DBC. We are mashed right up against the Andes Mountain Range of resistance. I think commodities overall are about to reverse lower, led by oil.
You see, it’s not a Trump thing. It’s an ‘America is so hopelessly indebted (as are other developed economies) that they have no choice now’ thing.
However the election shakes out – most likely Democrat president and congress, Republican senate – the stock market is cheering two things in my opinion. It is cheering US dollar compromising fiscal stimulus (Fed prints, politicians spend) and the coming of more US dollar compromising monetary policy (Fed prints, Fed monetizes bonds AKA debt, Fed screws with any other esoteric tool it can get its hands on in the age of MMT TMM, AKA Total Market Manipulation).
I have a still profitable position against the Euro that is about to tick un-profitable this morning. That was my hedge against a firming US dollar, which is the anti-market to the US stock market especially, but also to many global markets, because I am long US and global stocks. I may have to pull back to hedging stocks (including gold stocks) with high cash levels. So says the ongoing inflationary operation.
There are hundreds and hundreds of cryptos out there, but the general public knows one name: Bitcoin. For this reason, I suspect the bulk of prosperity and attention is going to stay on the market leader. Even if you compare it to a strong number two, such as Ethereum, Bitcoin remains the powerhouse, since it has the brand name (think “Kleenex“).
The stock market has always loved political gridlock. The reason? I suppose because the more enfeebled D.C. is, the less they can muck things up.
Imagine the likely political situation in which we have President Biden and a McConnell-led Senate. This is almost certainly going to be the case. Green New Deal? Not going to happen. Big tax increase? Not going to happen. Stimulus package to bail out blue states? Not going to happen. At this point, I think Biden could ask for a Hug a Puppy Day commemoration, and they wouldn’t let it through. So there’s going to be this huge government structure in place that gets absolutely nothing done.
As far as Wall Street goes, that’s just fine and dandy, as we’ve seen with the explosive move in equities every since we opened on Sunday……..