E TalkMarkets Tuesday Talk: Optimism Advancing On Turkeys

Optimism continues to advance in the market as we approach the Thanksgiving holiday. Boosted by the the AstraZeneca vaccine news, US markets closed higher on Monday. Encouraged by the GSA release of Presidential transition funds post-close, Tuesday market futures are trading in the green. On Monday the Dow Jones Industrial Average rose 328 points, closing at 29,591. The S&P 500 closed at 3,578, up 20 points; while the Nasdaq 100 rose 36 points to close at 11,905. Dow futures are currently at 29,854, S&P 500 futures at 3,603 and Nasdaq 100 futures are at 11,937.

TalkMarkets contributors are taking stock across the spectrum on a variety of topics as the Thanksgiving holiday draws near. Nelson Alves writing in Framing The Macro Scenario For The Post-COVID-19 World, a TalkMarkets Editor's choice column, looks at major indicators and finds that they stack up to a positive outlook going forward.

"Now that there seems to be a vaccine on the way, we should make some considerations about the current market environment. There is one wrong assumption that most market pundits have about the current economic landscape. I am referring to the consideration that GDP and CPI figures are roughly correct approximations for economic growth and inflation, respectively. They aren’t... The pandemic brought even more digitalization that does not have a proper reflection in the current statistics. The inflation is likely to be even lower than the current already low figures due to unaccounted productivity gains.

The confluence of these two factors justifies a fast recovery. First, the economic figures may not be as bad as perceived in the media, and second, the low inflation will likely be a fertile ground for further stimulus, perhaps, even before the inauguration ceremony. "

Alves while cautioning with regard to overheated pockets in the market notes the following:

"Looking ahead, the new administration will likely push for more stimulus, which guarantees an expansion of the monetary mass against a roughly fixed supply of gold. I’m still playing this with miners like Barrick (GOLD) and Kinross (KGC), which I believe are well-positioned to take advantage of the advance in the price of gold."

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William K. 1 month ago Member's comment

Some interesting articles and interesting thinking as well. There will be a recovery and it may be rapid if it is not slow and drawn out. I can agree with that, although I am not even certain that there will be a real recovery so that business approaches what we had "before."

And a VERY ALARMING suggestion for caution comes from a Bible scholar friend. That is a warning that these years may be "the last times" as described in the book of Revelation in the Christian Bible.

I am not sure what I think about that warning.

But if the world does end, nothing we can do to stop it, and so carry on as if it will not end. And then, if it does not end, well, one would be prepared for the post-pandemic-period, where the world does not end as predicted.