Friday Nov 13 2020
After Monday’s Spike, Markets Sputter
President-elect Joe Biden’s campaign promise to phase out oil probably signals the end of the long-delayed Keystone XL oil pipeline and threatens the future of Dakota Access, another major crude conduit.
Obstructing pipeline projects is one way Mr. Biden could accelerate America’s shift toward renewable energy, by making oil more difficult and expensive to move around. Other policies that require legislative signoff would be more challenging to implement unless Democrats won control of the Senate.
Based on Wall Street Jouranl Reports
We warned of the return of an EPA run wild in a Biden administration. Already his transition team is targeting pipelines. Next will be a war on natural gas similar to the one that put West Virginia’s coal industry out of business.
Last Monday November 9 was a big up day in the markets. The DJIA soared 1,600+ points. Crude oil jumped three dollars. Both occurred on the idea that a virus vaccine would soon be available. Then, the thinking went, travel and leisure activities might return to something more normal. Since then the DJIA gave back about 1,000 points. West Texas Intermediate hit $43 and now has receded to $41.12.
Market tops and bottom as often characterized by a final sharp spike, up or down, in a burst of optimism or pessimism on the market in question. That may be the case here. The advance decline ratio has dramatically fallen each day since Monday.
A lot hinges on the Georgia Senate race. So far the Senate is even at 48 Senators for each party. But both Georgia Senate seats are in run-off races for January 5. If Democrats Jon Ossoff and Raphael Warnock win, the Democrats will control the Senate via Harris tie-breaker vote as President of the Senate.
Biden is the Trojan Horse which has allowed un-electables like Bernie Sanders (next Labor Secretary?) and Kamala Harris (did not even last to the Iowa Primary) to achieve national standing. A Green New Deal, higher corporate taxes, open borders, handouts for fiscally irresponsible states all seem like an unlikely foundation for a continued stock rally. We have noted the high price earnings valuations of the tech stocks which have driven the rally so far.
Watch for the outcome of the Georgia run-off for the next clue about 2021.
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