If there were ever a time to throw out a lot of the traditional approaches to investment analysis, this is it. At least for a week or so. The US presidential election is squarely on the brains of investors. Plus, there are plenty of other stimuli, notes Robert Isbitts, founder of Sungarden Investment Publishing.
They include a deluge of earnings reports this week and next, highlighted by the daily drama of quarterly reports from big tech stocks. AND there’s a Fed meeting next week.
S&P 500 ETF Trust (SPY)
Amidst all the emotion of Nov. 5 (which would have been the 93rd birthday of my father Carl, who taught me stock charting when I was kid), I have my eye on something else. The long bond is getting crushed.
Since the Fed cut short-term rates six weeks ago, the 10-year US Treasury has vaulted from 3.6% to 4.3%. How can that be? The Fed does not directly control anything other than very short-term rates. Traditionally, the whole bond yield curve has moved in sync. But not when the market is so concerned about the enduring US debt, and the failure of both sides of the Congressional aisle to do much about it.
Meanwhile, the reality of quarterly earnings announcements and how they can impact portfolios is not lost on me. Not one bit. I see it every day in the stocks I own and those I don’t.
It is a casino. That doesn’t mean the odds are against us. But we can’t just “wing it.” Modern markets are different, and someone has to shout about that, since so many investors are still stuck using outdated rules, only to regret it later. So I’m the guy shouting.
