The election is in eight days.  Will the outcome end the extreme vitriol and animosity that has dominated society over the last 9 months?  I will argue COVID was the proverbial gasoline that caused tensions to rise to many flash points.  Like all I have my views about the possible outcome of the election, views that are about as substantive and supportive as my neighbor’s views.  The simple fact of the matter is only history will answer who had the correct outlook.

Democracy is ugly but is still the best type of government yet devised.

This is a big week for earnings.  According to Bloomberg, of the 58 S & P 500 companies that have reported results, 52 companies have raised their financial outlooks and only six have cut them.  The net improvement as a percentage of the total reached 63%, the highest since Bloomberg stated compiling data in 2000.

The immediate conclusion to make is that the economy did not continue to deteriorate and recovered much faster than expected, an environment that is evident by the loan loss reversals by the mega sized financials.   Speaking first hand, loan loss reversals are very rare.  Once reserved, regulators greatly dissuade management of any changes believing that there could never be too many reserves.

The economic calendar is comprised of several housing and manufacturing data point, initial estimates of third quarter GDP, and personal income/spending data.  How will this data impact the market?

Last night the foreign markets were down.  London was down 0.09%, Paris down 0.50% and Frankfurt down2.20%.  China was down 0.82%, Japan down 0.09%  and Hang Sang up 0.54%.

The Dow should open moderately lower on the absence of stimulus news, election, COVID cases and profit concerns.  According to newswires, 184 S & P 500 companies post profits this week.   The 10-year is up 8/32 to yield 0.82%.


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