Economy and the Market

Well the stock market is doing very well despite the incredible surge in COVID cases, deaths and hospitalizations.   The economic rebound has stalled and we may now be headed for a second wave of increased unemployment.  

So why is the market up?

1)  The market is not the economy.

2) The market is often wrong.

3) The market is looking ahead 12 months and assuming that we will have a vaccination and that enough folks will get vaccinated.  This could lead to an expanding economy - more jobs, more demand, growth globally.

But uncertainties exist:

Government funding ends on Dec 11.  No one can predict with role Trump may play in a CR.

Over fiscal relief spending ends on Dec. 31.  The prospect of a covid relief package - even a minor one will remain in doubt as long as Trump continues to fight the election results.

The pace of vaccination may not keep up with the Covid surge in the next 3-6 months. 

Post election snapshot

On election night I was a nervous wreck.  I stayed up until 5:00 AM.  It was about 3:00 AM that I started to feel hopeful.   Results came in from Milwaukee and Biden who had been behind by 100,000 votes was now ahead.  He was also ahead in Michigan, Arizona and Nevada and with the one elector from Nebraska he was on track to exactly 270.

At the same time the Biden camp expressed confidence about PA even though we were down by over 600,000 votes in the early returns.  Hour by hour Biden cut into the lead.  By 8:00 AM the lead was down to 64,000.

As the days went by the results in Wisconsin and Michigan firmed up and the PA gap closed relentlessly.  Nevada looked secure.  Arizona less so.  For some reason Arizona was the outlier with the mail-in votes.  AP and Fox News called Arizona but the other news outlets did not.  In the meantime Biden was gaining in GA.

Finally on Saturday the news outlets called PA.  The one of two who had not called Nevada now called that as well.  Biden was at 279 with Arizona and Georgia still a little unclear.  We all celebrated along with a huge sigh of relief.  

Of course, Trump did not concede.  At first his strategy seemed to be to file law suits in 6 or so states trying to get votes thrown out.  None of this worked.  The next plan seemed to be a recount.  GA had already decided to do a recount and Wisconsin seemed likely to do so.  But those two states would be insufficient to change the outcome.  On Nov. 19th Georgia finished the recount and Biden was the winner.  

The electoral college remained at 306 to 232. The popular vote had Biden up by 6,000,000.

On Thursday, Giuliani had a presses with a bunch on new bogus allegations.  The legal fight looks over.

That leaves the last hurdle.  Certifying the election state by state and voting for the electors.

Timeline:

By Nov 30 the majority of the "swing states" will have certified the election.

Dec. 8 is the safe harbor day when the electors are finalized.

Dec 14 the electors vote.  I see no chance of "unfaithful" electors changing the result.

Trump's last chance, and he's trying today by meeting with Michigan GOP state legislators is to have the state legislators ignore the vote in their state and try to elect GOP electors.  Would the GOP leadership in Congress go along with this.

At this point the following GOP Senators have congratulated Biden: 

Romney, Collins, Murkowski, Sasse, Rubio (partial)