Why This Market Is Heading Higher (and Why Trump Could Still Win)

Wednesday, 11 November 2020
Wollongong, Australia
By Greg Canavan

[3 min read]

The market outlook changed sharply yesterday.

A vaccine is on the horizon!

Don’t worry that it’s been developed in record time, that the long-term effects are unknown, or that the logic of mass vaccinations against a virus that only kills a tiny percentage of those infected is highly questionable, to say the least.

A vaccine is here, and damn the consequences! We want our overseas holidays…just give me the jab so I can get on a plane to Europe for the summer!

I guess I’ll be labelled an anti-vaxxer for raising these questions. That’s how the establishment play the game these days. Disagree and you get shamed. ‘Racist’. ‘Climate change denier’. ‘Anti-vaxxer’. And my favourite: ‘Conspiracy theorist’.

Our overlords coined that term when the plebs wouldn’t swallow the official story behind JFK’s assassination.

With that in mind, I probably shouldn’t ask if anyone else thought it highly coincidental that Pfizer announced their vaccine the day after the establishment media declared Joe Biden the winner of the as yet still undecided election.

No, that would be ‘conspiracy’ talk.

But really, how dumb do they think we are?

Speaking of the election, make sure you scroll down and watch the interview I did yesterday with Jim Rickards and his Strategic Intelligence Australia co-editor Nick Hubble. It’s an antidote to all the rubbish you’re reading in the US media right now.

Despite the media declaring Biden the winner, as Jim explains, the election is still very much undecided. He puts the odds of a Trump victory at 50/50. The market clearly isn’t positioned for this. If you’re interested in learning more about the possible twists and turns the US election could still take, this article is well worth your time. It’s a good companion piece to Jim’s comments.

For more insights from Jim, including how the US electoral system really works, and his views on gold, scroll down and click on the image below.

Now, let’s get back to the market, and the implications of a vaccine.

Before I do that though, I’d be rude not to point out that subscribers of Exponential Stock Investor (EXS) have already cleaned up. Ryan and Lachie, who run the service, recommended BioNTech, the company that partnered with Pfizer in creating the vaccine, back in June.

Subscribers who got on board then are now up more than 100%. As Ryan said yesterday:

Our pick — BioNTech — is now up over 100% for subs in EXS.

I think the Pfizer CEO called it the most important breakthrough in 100 years.

What’s key to understanding this apparent hyperbole is that he is right. Because this is the first ever vaccine created using the tools of synthetic biology. This radically changes the way we research and create drugs.

In this case it’s an mRNA vaccine (good info here — https://www.modernatx.com/modernas-mrna-technology) which is analogous to writing a code to interact with the bodies DNA so that you produce relevant antibodies yourself.

Anyway, big news!

Big news indeed!

One thing we have worked really hard on this year is creating services that cater to a wide range of markets. It is impossible to be all things to all investors with the one investor service. That’s why we price our ‘entry level’ services so competitively. It allows you to build-up a range of market coverage at a reasonable price.

At the same time, it allows our editors to focus on what they do best, and not have them try to cover EVERYTHING.

EXS has done an outstanding job of finding smaller companies that have exponential growth characteristics this year. Their results, on average, have been very impressive.

If you’re not reading their work, I suggest you check it out here. There’s a deal on at the moment that is just ridiculous. As the Editorial Director, I know how much work goes into finding these types of stocks. I’m constantly complaining that we don’t charge enough for our services.

So, before someone miraculously listens to me, I’d suggest you sign up!

The market response to the vaccine news was very positive.

While a bunch of ‘corona winners’ were absolutely smashed on the news (think online retailers, tech, gold stocks), the market response overall was very impressive.

The ASX 200 has now broken out strongly. We may get a pullback in the short term, but it feels like we’ve certainly moved away from the threat of a breakdown to test the lows from March.

The banks surged yesterday. This is a sign that the worst could be over for the economy. Remember, markets are forward-looking. The government and the RBA have thrown the kitchen sink at the economy in the past six months.

The banks can now borrow from the RBA for three years at 0.1%, while earning 2–3%-plus on home loans. It’s money for jam.

If you think this game isn’t rigged in the banks’ favour, you’re not paying attention. This is partly why I recommended readers of my Crisis & Opportunity service buy some of the banks last month. Moreover, the sector was at a 20-year low relative to the market.

Obviously, this service is also way too cheap. So if you want to sign up before I get my way, click here.

To give you an idea of yesterday’s powerful move, check out the chart below. It shows the % of ASX stocks hitting six-month highs. Although not shown below, it’s the highest reading since early 2013.


Source: Optuma

[Click to open in a new window]

Put another way, it’s a reflection of the ‘internal strength’ of yesterday’s move. That is, a lot of stocks rallied, not just a few large companies that move the index.

It’s hard to be bearish on such evidence. Despite the obvious problems in the economy, this market looks like it’s heading higher.

For now though, please enjoy my interview with Jim Rickards…

Cheers,
Greg