The shorter lead time economic indicators point to a moderation of the pace of recovery
both in the US and abroad, save for China. The recovery in business profits across the US
and Europe is projected to moderate. This data basically does not include the future impact
of widespread efforts to contain a new and dramatic upturn in Covid-19 cases. This will be
a patchwork affair, ranging from countrywide lock downs to more targeted and limited
controls. However you slice it, the outlook ahead is rather muddied. For the US, the 2020
national election may play a major role in how the economy plays out. For example, a
Trump loss and retention of a Senate majority may in effect lead to scorching the earth as
Mr. Trump just allows the Covid cases to run up while Sen. McConnell blows off any
chance for needed, sizable stimulus. A "Blue sweep" could ease matters somewhat in
the near term.
The SPX is nearing a correction, but is still far from being oversold for the intermediate term.
It could turn out that if there is a big blue wave the SPX could rally off short term support,
but if this occurs, there could be considerable volatility anyway as the SPX is far from
being oversold even after the recent sharp decline.
I have been a registered Democrat for sixty years and am hoping the Dems kick ass across