Last week, financial markets and economic data told very different stories.
Reviewing economic data is a bit like looking in a rearview mirror. Typically, it offers information about what is behind us. For example, last week we learned:
Despite positive trends in economic data, major U.S. stock indices delivered their worst performance since March 2020. Financial markets are the windshield. They show us what investors anticipate may be ahead. Last week, it was clear investors were not optimistic. There were a number of reasons they may have been concerned:
It’s possible we may see more market volatility this week.
WE ARE ALL IN THIS TOGETHER.
It’s election week, and Americans of all political persuasions are bracing themselves. We’re worried about short-term events and the long-term future of the country. In part, that’s because sharp partisan divides have obscured an important fact: Americans agree on a lot of things.
For example, in October, More in Common, a nonpartisan nonprofit working to bring Americans together, published the results of surveys conducted from June through September 2020 in partnership with YouGov.
The group’s report, Democracy for President, found the majority of Americans (81 percent) agree that democracy is imperfect but preferable to other forms of government. In addition, Americans:
About 7-in-10, “…say that elections in the United States are generally safe and trustworthy, and this number differs little between Democrats and Republicans.”
A majority of the Americans surveyed were concerned about election integrity. Regardless of party affiliation, they were uneasy about election officials and politicians discouraging voting (80 percent), results not being available on election day (75 percent), and the possibility of fraud if there is a long wait for results (73 percent).
It’s notable, even in our concerns about this election, we are worried by the same things.
As the week progresses, remember the United States of America has been holding elections for almost 250 years. We held elections during the Civil War, World War I, and World War II. Our robust election tradition has endured over generations because of our shared belief democracy is the best form of government.
That doesn’t mean Americans will always agree. We won’t – and that’s why we vote.
https://www.barrons.com/articles/the-stock-market-dropped-last-week-why-its-not-time-to-panic-51601079593?mod=hp_LEAD_3 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/09-28-20_Barrons-The_Stock_Market_Had_a_Bad_Week-At_Least_It_Wasnt_a_Terrible_One-Footntote_5.pdf)
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* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
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* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
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