Friday Nov 20 2020
Markets on Pause
If you had told me in March we would have a global pandemic and lock down the economy multiple times, and at the end of the year, markets would b e setting records, I would be shocked.
Tim Courtney at Exencial Wealth Advisors
Yeah, those are my sentiments as well Tim. But markets go where they want not where we think they might go.
Last week we noted that crude has held on to $40, stocks held the break out from Monday November 9, and all eyes should be on the January 5 Senate run off in Georgia. Not much has changed since then.
The presumptive Biden Administration will take aim at all things carbon related in the energy industry. Biden dislikes pipelines. Yet the Alerian MLP has moved from $187.50 to $25.26 since the start of October. Halliburton HAL managed a stunning ove from $10.50 to $15 since early October.
Natural gas prices doubled from $1.70 in June to $3.40 at the start of November. Warmer weather has prices falling now to $2.59.
GM plans to spend some $27 billion the next few years to cement a lead in the electric car business. GM also plans to build its own batteries. The claim is that the new battery chemistry will hold twice as much energy as the current battery. That sounds like more range but no comments on charging time. An additional claim is that costs are coming down especially when fuel and maintenance of an I/C engine are factored in. This week the UK announced a move to all electric vehicles by 2030. So the march to all in for electric is underway. This is remarkable in that electrics are less than 2% of the current market and the battery technology is still developing.
Even Exxon -Mobil has moved from $32 to $37.40. At this price the dividend yield is 9%; the debate continues on the viability of that dividend.
Dow Industrials and Transports registered new highs which sounds like a Dow Theory buy signal. The uncertainty of the January Georgia election will determine the Senate Majority by a mere one vote may be putting a lid on any further advance.
Should the Democrats prevail in those two races, I have no doubt Supreme Court Packing, statehood for Puerto Rico and DC, tax increases, and open borders will quickly develop. The Democrats will do all they can to establish a vote proof permanent majority. Given the arguments over the Presidential race now, Georgia is setting up to be the Controversy of 2021.
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