I want to start by saying this is not a political newsletter. As much as people are talking about politics right now, that is not my area of expertise. But it’s hard to be right at the end of a major election cycle and NOT talk about how it’s affecting the area I AM educated in: the stock market!
And with something as big as choosing a U.S. president, there are going to be major connections between the government and global economics.
Today, we discuss our current issue of politics vs. economics and how one affects the other.
Case in point, we’ve discussed the poor response the markets had when President Donald Trump announced his coronavirus diagnosis… He was moved to Walter Reed and the markets made a sharp swoop downward.
Not even a week later, Trump is back in the Oval Office, touting that he is feeling better than ever. Now potentially immune to the disease due to the treatments he received during his hospital stay. And with this news update, the markets took off again.
But this dramatic change in market direction might not be for the reasons you think…
Politics vs. Economics
Despite the physical man or woman behind the Resolute Desk, the U.S. president being told they have a potentially deadly disease is terrible news. Not just for the individual, but those dependent on their health to prosper.
This is despite your political party!
So when the news broke, investors were concerned how it would negatively affect the economy, and a sell-off began.
But President Trump being healthy isn’t the ONLY concern for the rise in the markets. Many investors have their fingers crossed that doctors may have accidentally stumbled upon some type of cure or treatment for the coronavirus during their treatment of the president.
Finding a cure for this black cloud pandemic that has been hovering over all of 2020 would have MAJOR impacts on every aspect of our daily lives. Including our willingness to go out into the world and spend money.
Government, economics — our society in general —it’s all just one giant machine. When one part of the machine stops working, it becomes unusable. Obviously, the idea of an “unusable” United States leaves many around the globe panicking, no matter their sector of employment. Despite our differences, we all depend on each other!
Now, though markets are working their way back up, we’re not out of the woods yet. Unfortunately, we have no choice but to sit around and wait for the status of not just a vaccine that could lead to the end of the pandemic, but the final results of the 2020 election.
In the end, maybe politics and economics work in tandem to help the giant machine that is the United States run smoothly? Today, we dive into these topics further, reviewing several selected charts to help support my overall market thesis and help lead to profitable investments for us all.
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Now the markets are moving all over the place, but the exact same pattern that he saw in March is lining up again…
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