Transcript
Hello, everybody, welcome to Monday, the S&P 500 was down almost .7% today. And there was a really interesting leadership for the stocks that did do well today. They were mainly concentrated in the area of what I call the Recovery Stocks: your banking and finance and those types of stocks that seem to be needing the virus to, you know, get under control in order to do well. And but I’ve been getting quite a few questions about whether or not this Trump impeachment attempt, the second one, is going to have an impact here on the stock market. And so let me cover that just real quickly.
So I presented last year that I feel that the three key pieces that we really need to focus on in 2021 are the vaccine, the pent up demand, and the interest rates. So if we take a look at each one, does the impeachment, you know, have an impact on the vaccine, the efficiency of it, and how that’s going to work in those types of things? I don’t think so. I mean, it’s coming out slowly, it needs to come out more quickly. But at least we’re hearing, you know, very few real horror stories about people that took it. And so that’s a good sign, I think things are going in the right direction there.
The next one, of course, is just the pent up demand. I expect the pent up demand will come you know, after the vaccine really gets released, and everybody starts to take it. So that’s going to be separated by time from this impeachment really look at that as sort of a second half issue for 2021. So I don’t think the impeachment has a big impact there. And then we got interest rates. Well, interest rates are interesting thing, you know, the Treasury 10-year treasuries now up to 1.1%, which is still ridiculously low, but it was at .7, so it’s rates are coming up just a little bit. But none of that has any impact or has been caused by the cons, the concept of doing a second impeachment attempt.
So I really think all three of those are still in place. But there is now kind of a fourth thing, because the Democrats won in Georgia, there is now a thought that they might be able to push through some more stimulus. And I think part of what we saw in the big returns that we had last week was that thought, especially because it came mostly after the election in Georgia was over. And so, and this impeachment somehow impact of future stimulus bill, I don’t think the stock market needs more stimulus. And there’s a lot of controversy about stimulus. And I won’t get into all of that.
But I will say if they put out more stimulus, the stock market will go up even more in the short term, long term. And how do we pay it back? There’s all kinds of issues. But in the short term, the stock market goes up with more stimulus that I can say, quite confidently. And so does this second impeachment impact the possibility of another stimulus? Does it create more political divide, which is actually kind of hard to imagine, with what’s happened so far, but it’s possible.
There might be some give and take that has to happen there for this to go down, and that could weaken or create problems for the other stimulus bill. So I consider that kind of the fourth piece, it’s the icing on the cake. As far as the stock market goes, I’m not too worried about that next stimulus as far as the stock market goes very important for all kinds of different reasons. But the stock market is doing quite well. You know where it is right now. And the way things that are going so I don’t see it, as you know, the impact of the second impeachment, I think is going to be somewhat muted. And I think we’ll be okay as far as that goes.
So, so that’s kind of the message of the day. I hope that we get a chance to look at what’s going to happen tomorrow. I you know, we should be able to get our pieces back on track here. We just had such a fantastic week, last week. We had some pieces take a rest today, and I’m okay with that. I think we’re doing really, really well. So look forward to talking to you tomorrow. Thank you very much.