Post & Comment {9.13.19}

This is a new feature I added over the summer where I respond with a brief comment to something I've seen in the news or online.  The headline question I've highlighted.

Market indices are near all-time highs.

That is correct.  We are back to levels now seen in late July on most major market indices.  However, we've used up a lot of buying power to get to these levels and investors should watch price action in order gauge whether there's enough enthusiasm at current levels to propel us higher.  Markets are currently overbought by our work.  That doesn't mean they can't work higher but it does mean that caution would be advised before deploying capital after this latest spurt higher.

There seems to be a thaw in the trade war with China.

Perhaps.  What seems to be out there so far is both sides willingness to sit down again and for both sides to offer small concessions that don't really seem to get at the heart of the matter such as intellectual property and open markets in China.  Markets have been held slave to trade all year and it seems would be vulnerable to the downside if relations take a turn for the worse.

The Democratic debates.

Biden still seems to be the frontrunner.   I think the President is in deeper trouble in terms of getting reelected than Wall Street currently expects for reasons I'll go into in a future post.  That being said if the Democrats nominate somebody from the hard left then his path to reelection becomes easier.  An Elizabeth Warren candidacy would be easier to run against than somebody who's closer to the center.

On the chances of the Democrats enacting much of what they're promising in the debates.

Unlikely unless they can control more than 60 seats in the Senate in 2021.  The lone exception to this may be gun control which I think is going to emerge as a bigger issue next year than most politicians currently expect.

Back Tuesday.