Whenever there are elections or primaries, we like to spend time flipping around and listen to what different networks are saying. Based on what we’ve heard over the past two nights, the support for Donald Trump from Fox News is waning. That wouldn’t be taking place if they didn’t think he was going to lose. Of course, by saying that VP Biden is probably going to win the election, we’re not telling you anything you don’t already know...but we just thought that the recent tone from Fox News is confirmation that President Trump is going to lose.
Anyway, the rally in the stock market broadened out yesterday...so that is positive. The breadth on the S&P 500 improved to almost 5 to 1 positive (from a slightly negative level the previous day...despite the big rally)...and the S&P 500 equal weight index rallied just as much as the regular S&P 500 index (compared to badly underperforming that index on Wednesday).
This does not mean that the rally will continue in a straight line. The futures are trading lower this morning, so we could/should see a pull-back going into the weekend. In fact, a short-term pull-back would be normal and healthy after a 7.4% rally over just 4 days...and given the fact that the definitive result on the election has not been decided yet. More importantly, there are still some serious questions about what kind of impact the new wave of the coronavirus will have on the economy. This newest wave is still in the very early innings, so there are definitely some questions about how extensive any renewed lockdown might be in the coming weeks.
The strong employment report is giving the stock futures a bit of a bid...and thus they are trading off their early morning lows. However, given the huge ...