Contested Election Fears Are Weighing On Investor Sentiment

Commenting on the contested election fears and today’s trading, Gorilla Trades strategist Ken Berman said:

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Q3 2020 hedge fund letters, conferences and more

The Fears Of A Contested Election

The major indices are all trading higher at midday as last week’s severe selling pressure eased ahead of tomorrow’s elections. Despite the rally, volatility remains very high amid the political uncertainty and the raging pandemic, and stocks are likely to experience wild swings in the coming days. The fears of a contested election are still weighing on investor sentiment, and while the Volatility Index (VIX) is slightly below last week’s levels the tension is still apparent on the Street.

Should You Go All In On Water Like Michael Burry?

Water investments? Michael Burry was one of the first institutional investors to bet against the US subprime mortgage market in the mid-2000s, and today he’s concentrating all of his investment efforts on one commodity: water. Burry’s focus on water has attracted plenty of attention to the commodity in the investment community but trying to profit Read More


In economic news, the ISM manufacturing PMI provided a massive positive surprise hitting its highest level since late-2018 with a reading of 59.3. On a negative note, construction spending slightly missed expectations, but the outlook for the manufacturing sector continues to be bright even considering the spike in the number of COVID cases. Thanks to the bullish PMI and the overnight rally in global risk assets, the Dow is back above its September low, together with the S&P 500 and the Nasdaq, and that gives hope to bulls that a tradable bottom is near.

Market Wrap

Dow: 26,875, + 374 or 1.4%

S&P 500: 3,296 + 33 or 1.0%

Nasdaq: 10,950, + 38 or 0.4%

Russell 2000: 1,559, + 21 or 1.4%

Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a 5-to-1 ratio on the NYSE at midday. 18 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 27 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a mixed and choppy afternoon. The key cyclical sectors have been leading this morning’s rally, thanks to the blockbuster manufacturing PMI, with defensive issues and stay-at-home stocks showing relative weakness due to the improving sentiment, but it’s too early to conclude that bulls are out of the woods. Stay tuned!