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Well, we have just over a week to go before the election. Of course, that doesn’t mean that we’ll get rid of one of the “uncertainties” in the market place...because the Presidential election AND/OR several of the Senate elections could easily be contested. Either way, based on what we’ve seen over the weekend and this morning, there will still be some considerable uncertainties surrounding a 2nd wave (or 3rd wave...depending on how you count them) of Covid-19 hitting many parts of the northern hemisphere.
We all know that the treatments for Covid-19 are a zillion times better than they were in the spring, so the death rates will be much, much smaller. We also know that the lock-downs are likely to be less stringent than they were last spring. However, given the level of the U.S. stock market right now, those assumptions are already priced-in...and then some!
We’re definitely seeing a preview this morning of what this healthcare crisis could have on the markets as we move into the colder months. The futures are trading lower on the news of a big spike in Covid cases around the world (with the U.S. seeing almost 90k infections for the second straight day)...and renewed lock-downs in more and more countries (like Italy now). However, probably a bigger story this morning is the negative news out of Germany’s SAP...which is down 20% after they cut their full year revenue estimates and said a fresh wave of lock-downs would hurt demand through the first half of next year.
Needless to say, the potential of this kind of development is ...