Today is November 4 and it is 6 am
September and October delivered the seasonal results we have come to expect. These months tend to be seasonally weak and they did not disappoint this year. On the six month cycle, November to April tends to be the better six month performing cycle versus April to October.
The top story over the last 6 months has been the Pandemic and how it has impacted all of our lives. Many industries are suffering terribly while others are flourishing. Avoiding the suffering industries has been tantamount to our investing success this year. Yet, the pandemic continues to occupy every media airway you turn to.
I went for my annual physical yesterday and knock on wood, everything is well. I have been going to my Doctor for the past 20 years and so I have gotten to know him pretty well. He walks into the room and the first thing he says is you don’t need to wear that mask. He is wearing a face shield but no mask as he enters but removes the face shield and sits it on the counter.
Now this is a guy that is very busy and likes to take care of business and move to the next patient. So I quickly ask him about the face masks since I know he is always in a hurry. He proceeded to speak about the face masks and pandemic for about 10 to 15 minutes uninterrupted. He never does this. He directed me to the following website https://gbdeclaration.org/. I suggest everyone read this website as it was put together by the top infectious disease experts all over the world. The primary architects are from Harvard, Stanford and Oxford and it is called The Great Barrington Declaration and Focused Protection. I think you will find this most informative.
And now for the biggest topic of the day, The Election. The only thing clear about the election outcome is that we remain a divided country. There was no blue wave and no red wave. We don’t know who the presidential winner is yet and may not know for some time. Did we really expect anything different given this is 2020 after all???
The markets seem to responding well to this as premarket futures are all up. Government may remain in gridlock as it appears this election outcome may be headed to the Supreme court.
As you all know, I prefer to focus on the data and not make predictions. Here is a chart of index performance during November over the past 20 years.
According to Stock Traders Almanac, since 1950, November has been the best month of the year for the S&P 500. It is also the second-best month for the Dow, the Nasdaq and the Russell 2000. This year we are off to a good start in November and if seasonal trends hold, I would expect a strong finish to the month. Remember the single biggest variable that determines market direction is Fed Policy and Fed Policy remains highly accommodative. All major averages remain above their intermediate and long term trend lines. I remain optimistic.