October 11, 2020
Weekly Market Outlook
By Keith Schneider
Equity Markets worldwide rallied this week. In the US it was led by Small Caps (IWM/Grandpa Russell) which was up 6.42% for the week and over +9% for the last 30 days. Interestingly, Transports and the Retail sectors now have the strongest TSI (Trend Strength Indicator) readings within the Modern Family.
Regarding the Presidential election, Mr. Market seems to be having a schizoid moment with sectors and country performance showing a Biden win, while the general market is predicting a Trump victory. The strength in Solar and Clean Energy has been more remarkable.
Before Presidential elections, a bullish stock market generally says the incumbent will win especially if it is a Republican. Over the long term the markets have done equally well under both parties, short term however the above sets the stage.
Have the Robin Hood traders skewed the sector returns and will they vote based on what is in their portfolio?
The highlights of this week’s market action are the following:
In summary, equities are looking much improved across the board although running a bit rich and considering the massive upthrust it could continue or work off its overbought reading by treading water. Of course, if there is a contested election it all could become unhinged. Stay tuned!