Brace For it…
We are not fearful of “the Future.” But, numerous “things come due” next week. The list is impressive and it’s our focus this morning.
Because in order to profit in markets, it’s useful to have some idea of “what’s out there.” Guess the future right and picking winning stocks is a whole hell of a lot easier.
As we have long-held: There are two kinds of Future. There is God’s – and no one will know the hour, comes like a “thief in the night.” But the vast majority of Future is procedural.
Many “events” in Life that are like ‘squeezing a balloon.’ When you squeeze a partly filled balloon in your fist, it “pops out” somewhere else. Cause effect, decision-result…
Human invention, decision-making, plans, and schemes all work like that. Best laid plans of mice…and all that!
Here’s our list of things to be tracking into the near futuresphere:
The Vote: Biden’s Nearly There
Pennsylvania has been a “side show.” Although there will no doubt be questionable ballots found, our view since Wednesday has been that a likely path for Biden exists to the White House via Nevada and Arizona.
Already, the Associated Press is calling it this way, as well. Citing here a Biden count of 264 Electoral Votes. Since we consider Las Vegas a strong labor and immigrant population leaning left, we figure when those results are update (expected around 11-12 today Eastern time), Biden will have his chance to call victory. Markets may turn down…hard.
Axios makes an interesting observation as well: Noting that counties which had the biggest Coronavirus outbreaks tended to be Trump supporters.
More to the point, though, as you can see on the Politico map over here, either a win in Nevada OR Georgia would “put it away” for Biden.
One thing this election cycle has set up is the “usual” American monetization answer to all social problems.
Yes, that’s right: Name one other economic system in the world where the small investor can lay a bet on the growth of social disorder?
It’s genius – or Dr. (Julius) No. Not sure which…
Election Investor Takeaways
There are two major “learnings” to be extracted from the past six-months of national mania.
First: The Election is over. Sure, Trump is throwing teams of lawyers at the problem of not winning, but we can see future historians writing Trump was good on policies (which we supported- and still do), but torpedoed by his mercurial temperament which is manic to say the least.
You may not need examples of it, but we think these headlines sum up the loss:
- Biden eases ahead in Georgia, Trump attacks Election process.
- As Trump doubles down on election falsehoods, America’s allies are dismayed and disturbed.
- Trump steps to podium, baselessly attacks election.
- Biden makes gains in key states, Trump pushes baseless claims of fraud as vote counting continues.
The reason for pointing out the “pending reality” is that it is not what a lot of our readers were hoping for. But now, since the election is in the hands of lawyers and courts, we need to be prepared – and perhaps quickly – for there to be a major sea-state change.
We figure Trump will lose most of his election lawsuits for the same reason Hillary Clinton is still free: There’s the matter of evidence.
Second point, following from this: Investors who have big profits this year, may which to pay very close attention to Thursday’s Fed guidance and dial-in the possibility that the Senate could be (nearly?) a toss-up. In which case a change in long-term gains next year becomes possible. That – as we have warned – has the potential to drive this market down to the 3,000 level.
The vision of Kamala casting a deciding Senate vote is pretty clear in future.
The Fed’s Warning
Since (as we predicted) there was no second economic stimulus ahead of the election, there is almost no chance of one now until at least February of next year. Deals take time and no one’s dealing till the dust (dirt, then) settles.
After the FOMC met this week, the KEY WARNING in their statement Thursday was this:
“The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”
Before we go sizing that up, however, two PiP’s (points-in-passing):
First, the creation of money has been HUGE. Here’s the latest H.6 Money Stocks view:
Secondly: We believe that the entire market rally from the March lows – where the Fed was forced to print like crazy – has been phoney.
In the sense that while the rally numbers are real, there has been no (or little) actual recovery on a purchasing power parity basis among big companies. Prices may be high, but unit volumes tell a different tale.
You see it between-the-lines in stories like “Disney Recovers 45% But Will Not Reach Its Pre-Covid Level Anytime Soon. And it’s a worldwide phenomenon as China’s Xi Eyes Sub-5% Growth Rate in New Vision for Chinese Economy.
China is starting to “need a war.” Taiwan in January, days after the Inaugural for Biden?
CV-19: Risks and Outlook
With son G2 back at his home fire department in eastern Washington, after working Covid surveillance on the East Troublesome fire, we note that the global case count is quickly coming up on the 50-million case mark.
That milestone is probable next week. We’re at 48.8-million cases (and 1.235-million deaths) as of today. This as “US surpasses 100K cases in a day again; Massachusetts restrictions begin; Idaho hospitals running out of space.”
Economic impacts will necessarily continue; cause and effect again. Sorry, but we don’t expect the Biden presidency will bring any more reliable management of the pandemic to the table. Look at Europe for proof.
Stock futures were already pointing down 200 on the Dow and 30-ish on the S&P when the federal jobs report numbers posted.
“Total nonfarm payroll employment rose by 638,000 in October, and the unemployment rate declined to 6.9 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. In October, notable job gains occurred in leisure and hospitality, professional and business services, retail trade, and construction. Employment in government declined.”
The way we tear into this, the two main measures to form decision-making around are the Total number of people Employed.
That figure today is: 149,806,000 employed. And that compares with 147,563,000. So a big gain of 2,243,000 (2.2+ million) from September to October. But a year ago, the number of people working was 158,544,000 so still down almost 10-million actually working.
That, naturally, ripples into lower spending, lower sales (unit volumes, though not necessarily prices paid) and shortfalls in government tax revenues. One more reason to be wary of the future of preferential gains rates in 2021.
The Other key number is “How Many Jobs were Made-up?” I’m sure someone in Labor won’t be pleased that we speak so directly. But IRL *(in real life) people “make up” lies. In government, there are carefully extruded “statistical inferences…”
We see this all over the place – keep an eye out for it. Alan Greenspan was my favorite “wordsmith.” He was fond of speaking of the Fed in the “royal We” manner. And using phrases like “…in our judgment…” Which, I shit you not, means guess.
The “Guess” at new jobs is in the CES Birth-Death Model which accounted for only 344,000 of the 2.2+ million gained. Which is likely a good estimate, judgment, or guess.
Re-Selling: Alarmist’s Due
With the election results almost in pocket – though not the one we were pulling for – it figures the media will have to return to tilling what little news there is. So that will me mining the “click-bait numbers” like “gender” “climate” and “race.”
That’s only a theory until we go out hitting the search engines. Where my sampling found stories like:
- Gender pay gap narrows only marginally in Europe.
- Bloomberg Equality: A Gender Twist at the U.S. Election Polls.
- Climate change and food demand could shrink species’ habitats by almost a quarter by 2100.
- Rich Countries Missing the $100 Billion Climate Finance Goal.
- Systemic racism, not $200 Air Jordans, suppresses Black wealth.
- And claims that Systemic racism is a drag on the US economy.
In sales and marketing terms, we look at this as “seeding the market” – where you lay some groundwork ahead of a product introduction in order to have the new “value proposition” more readily accepted.
Feel better? Sure, you have more value than being just a “click bait” consumer…but how much more?
Speaking of Climate Though
News contributor Linda in Houston spied this as something to be thinking about: “Famed luxury carmaker Bentley to go all electric by 2030…“
We’re not sure such luxuries will survive what we have penciled in a 27-year global war breaking out between now and then. Besides, thanks to Coronavirus our old 2005 Lexus is still running like a top. (knock on wood!) We drive less than 3,000 miles a year now. In fact, might only be 1,500 miles this year(!).
I offered to buy Elaine a Corvette for her birthday and she turned it down. “Roads out here in the Outback are too rough…I’d never put a Corvette on them…”
“Well, how about a Caterpillar D-9 with a rock-ripper on it, dear? A little less stylish, but you make your own road…6-way blade, right?”
(Her eyes rolled…) Just trying to be helpful, though. (Who me? Selfish?)
Weathering the Gulf
No telling which way Eta will turn – for sure- when it gets up into the Keys this coming week. But, if I were in Louisiana, I wouldn’t be putting away the sand bags yet…,
A lot will depend on cold air masses moving southover CONUS.
And, wouldn’t you know? An early winter storm will blast through the west this weekend.
Around the Ranch: Machines Making Machines
A dual-purpose report in our Sunday “Making” section. I’ve written up an Ender 3 build companion for that will also appear on our Ultra-Make.com site.
3D printing is a whole new frontier…and if you’re over 60, you may not be “comfortable” taking it on. That’s why the notes on building one.
Part of the second piece was done Friday. And here’s how it looked:
What’s so cool about 3D printing is that we are really living in an age of Sci-Fi comes to life.
Because this is a picture of a machine (3D printer) making new “parts for itself.” That’s an arm I just printed that holds the filament coming off the spool so the feed is better into the extruder drive.
The shocker here is how many products can – when we evolve it all – be emailed instead of sold as hard-goods at the store. When you can print a wastebasket, parts bins, or other items (Disney sign clones, for example), it’s only a small leap to printing food.
Since we’re in our 70’s, seems to us one of the best ways to “stay young” is to be (act) that way. People who get stuck in their ways get stuck in the ground.
Grab the future firmly as long as you can hold onto it. Too much fun to be had on this side of the lawn, for us leave for a long time, thanks.
Write when you get rich,