Written by Michael Forrester – Founder, President, and CIO of High Note Wealth
Breathe in, breathe out. Big stretch. Clear eyes – full hearts, can’t lose. Okay, let’s get to it.
We had quite a week. Instead of rambling on about the ins and outs
of the political “fun,” we will keep it very simple by saying, many got the
result they wanted, and many didn’t.
Such is politics. Three days
post-election and we are still waiting for an official call, but signs suggest
that Biden will be, could be, might be, has a higher
probability to be the next President. Avoiding
that landmine of a topic, the overall result is setting up to be positive for
markets. As discussed, the market pays
little mind to who wins the highest office in the land. Rather, it cares more about the makeup of the
government as a whole and the results are crystal clear – the ideological
center won.
With close elections at all levels across the country, there was no repudiation of Trump nor a blue wave. It looks like the Senate and House will be very close to split. Hello gridlock, our old friend. Under a stalemate, the market has little to process in terms of new tax laws, regulations, or major spending increases/decreases, which provides a calm backdrop for which it can do its “thing”. This week we have seen just that with U.S. stocks moving back to levels near September peaks.
Coming into focus in the near-term are rising COVID cases and the ability to get a stimulus deal done. The potential for additional shutdowns and job losses loom as we move into winter. The data coming in for September/October has been quite strong with corporate earnings beating estimates and unemployment improving, while we are reporting all-time highs in daily cases. Simply put, profits good, cases bad.
As this all continues to unfold, we will keep a close eye on anything and everything that affects the grassroots level, as in, your financial security. More on all of this soon.
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Big Weed for the Big Win
Lost in the shuffle of the red vs. blue contests this week was the increased footprint of the legal cannabis industry. Arizona, Mississippi, Montana, New Jersey, and South Dakota all passed measures to legalize for recreational and/or medical use. Once these states go live, approximately one-third of the country will live in states with legal recreational use. For the two-thirds holding out, good luck? Clearly, the writing is on the wall for federal legalization when the great and conservative leaning state of South Dakota gets it passed.
For the most part this isn’t good news for the Canadian cannabis companies whose stocks are darlings of the day-traders. The U.S. industry is still small, fractured, and difficult to parse, but that will be changing. For it to truly be investable, we need federal legalization allowing the banks to be involved. More info here.
Nobody Putins Vladimir in a Corner
News dropped yesterday that the Russian President-for-Life may be stepping down as soon as January due to health concerns. He is 68, but it seems that he was poised to hold the seat for the next 15-20 years. While the initial report could have easily been dismissed as a rumor, that got trounced today when Russian lawmakers introduced a bill that would [checks notes] grant lifetime immunity from prosecution to former presidents. Russia is still a small player in terms of global economics, but they are significantly important to the stability of the region with influence far and wide. This will be an interesting one to follow.
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