Today is Monday November 9 and it is 7:30am.
Dow Futures, S&P Futures and Global Stocks are soaring premarket on just announced Covid Vaccine News. Pfizer just announced that their Covid – 19 Vaccine is more than 90% effective in first analysis. The market loves the news. Many are calling this a “Great day for Science and Humanity”. All major averages are now above their short, intermediate and long term trend lines. From a trend following standpoint this is excellent news.
On another note, I see that Warren Buffett invested heavily in the 3rd quarter. He invested a net $4.8 billion in stocks and a record $9 billion on buybacks in the 3rd quarter. From an observer’s standpoint, this seems to saying that he believes his company is a good value and therefore invested liberally in himself. Since his company spans wide sections of the overall economy, this sends a very good message to the market.
I haven’t talked about interest rates in a while but I wanted to talk about real interest rates. Real Interest rates are equal to nominal interest rates less the rate of inflation. The below chart shows Real interest rates in Blue.
So the above chart shows Real Interest rates at -1.25%. Negative real interest rates can persist for a very long time. This has occurred many times in our history since the 1920’s. As we all know, low real interest rates is stimulative for the economy and the market. I remain optimistic about near term market prospects.
I wanted to send this out quickly as I believe these developments are most encouraging. As always, thanks for your continued support and if you have any questions regarding anything financial, just give a call.