6 November 2020

1) This year’s elections are revealing some interesting things about the new young voters and the society they want. Voters are backing legalized drugs, higher wages and voting restrictions. In Oregon, they have eliminated all criminal penalties for possession of hard drugs. Four other states legalized recreational marijuana. Voters continue to support higher wages with minimum wage settings in states, with Florida raising their minimum to $15 an hour. Abortion encountered more restrictions on the state level. Several states adopted measures, including constitutional amendments, to limit voting rights to U.S. citizens only.

2) The White House task force is warning that new cases of Covid-19 are increasing ‘exponentially’ despite President Trump’s claims that the pandemic would vanish on November 4. Rising case numbers, hospitalizations, and deaths nationwide are causing the task force to sound dire warnings. Recommendations are 1) Do not gather without a mask with individuals living outside of your household, 2) Always wear a mask in public places and, 3) Stop gatherings beyond immediate household until number of cases and positive tests have decrease significantly. The task force is warning states and universities/colleges of the risks during the up coming holiday season and the increase risk of spreading of the virus. States with the highest number of new cases per 100,000 are North Dakota followed by South Dakota, Wisconsin, Montana, Wyoming, Iowa, Alaska, Nebraska, Utah, and Idaho. Vermont remains the state with the lowest number of new cases.

3) Renowned investor Warren Buffett’s (Berkshire Hathaway CEO) favorite market indicator nears record high, signaling stocks are overvalued and riskier than ever for investing. His indicator takes the total market capitalization of a country’s stocks and divides it by quarterly GDP in order to compare the stock market’s valuation to the size of the economy. Currently that’s 168% which signals a record disconnect between asset prices and the economy, and a warning to investors to exercise a great deal of caution towards equities as an asset class. The stock market has never been as expensive as it is today, and not only does this mean that forward returns will likely be exceptionally poor, it means that downside risk has also never been greater than it is today. This indicator also soared before the dot-com bubble burst and surged in the months leading up to the 2008 financial crisis.

4) Stock market closings for – 5 NOV 20:

Dow 28,390.18 up by 542.52
Nasdaq 11,890.93 up by 300.15
S&P 500 3,510.45 up by 67.01

10 Year Yield: up at 0.78%

Oil: down at $38.51

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