E Selloff Day Two

The US reported a higher employment figure, 1.37 mn people in work, than the forecast 1.32 mn for Aug. The level of unemployment is well down, at 8.4%. That's the good news. The bad is that our trade deficit in July hit a 12-year high as imports replace what would have been made in the USA.

For the record, I did not predict problems for US stocks if the election results are hard to interpret. I quoted Jack Hough of Barron's. Today Pres. Trump suggested his voters should vote twice, postal, and in person. This is illegal and advising it is illegal.

Some good news. The Lancet, the UK's most respected medical journal, says Russia's Sputnik vaccine against corona-virus has no adverse effects and appears to stimulate creation of antibodies. Naturally, this news took down more sedate pharmaceutical stocks playing by the rules, with trials including placebos and large numbers, which the Russians didn't bother with.

Day two of the selloff briefly saw a gain in the DJIA, but once the market fully opened the rout continued. One reason for the rally failing is that we face a 3-day weekend. Another is the revelation of who lost the most on Thursday. It was Softbank (SFTBY), the Japanese financial group owned by Masayoshi Son and its allies who were heavy buyers of long options on US tech stocks which cratered yesterday and today. SFTBF fell 1.7% here today but there is more to come.

Israel is closed today for its normal weekend, so its shares are being clobbered as before you can arbitrage movements, you have to survive Sunday and Monday. Hong Kong, which also is closed now, fell when it was open. Since Softbank's Son is an ethnic Korean, some of our holdings from there are also down, but there are other reasons discussed below.

The most terrifying news today is that Smith & Wesson (SWBI) more doubled the sale of guns and ammo in the last quarter compared to 2019.


*The spill-off may help traditional Japanese finance groups recently purchased by Warren Buffett's Berkshire Hathaway and me. So far Sumitomo (SMFG) is up 1% and Mitsubishi (MSBHF) up 0.7% but I don't follow the other 3.

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Our Global Investing website is due to go live next Tuesday. Monday is a holiday. Cross your fingers. The job was 75% paid for in 2019 but nothing was done until July.

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