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08.13.2020 by David M. Smith

The Democratic Ticket is Set and Wall Street Takes Notice-But Does it Matter?

Leading up to a Presidential election, there is always speculation on the economic impact depending on which party wins. History has shown no matter which party is in the White House there is little correlation to overall stock market returns. Forbes This year the speculation was that large government tax and spending proposals by potential Democratic candidates could possibly hurt the economy or stock market returns. But after months of speculation, Presidential hopeful Joe Biden chose Sen. Kamala Harris as his Democratic running mate. In her previous government positions, she was viewed as a moderate. Her as the potential VP may have eased the concerns of investors and businesses and many on Wall Street welcomed her selection. CNBC WSJ

Government regulation and taxes can have a big impact on industry sectors and individual companies. But the engine for the overall stock market is company earnings. And the earnings engine has grown during many different administrations. Here is an interactive chart to compare stock market returns by President (stocks did very well under Calvin Coolidge, who knew?). Macrotrends

VP Pick Quick Hit Articles:
  • What Kamala Harris Brings: Greg Valliere
  • Harris Brings Experience and Law-and-Order Baggage to Biden Ticket: Bloomberg
  • Here's What Kamala Harris Brings to Joe Biden's Campaign for President: CNBC
  • 3 Keys to Joe Biden Picking Kamala Harris: Axios
  • Kamala Harris VP pick: How She Could Help – or Hurt – Joe Biden: BBC
  • In Kamala Harris, a Choice at Once Safe and Energizing: NYT

Jobs and Employment Climbing Back: The jobs report indicated nonfarm payrolls increased by almost 1.8 million in July and the unemployment rate fell to 10.2%. Both numbers were a little better than forecasts but the increase in jobs slowed versus May and June. Job gains in the last three months are over 9 million but that is still almost 13 million less than in February. It's good employment continues to increase, but there is still a lot of murkiness in the numbers. CNBC Schwab

Stimulus Bill Update: Not much to update as the Senate and House are at an impasse. As of now, the Republicans want a $1T bill and the Democrats have moved down from $3T to $2T. The price is close but there are still areas of disagreement. President Trump signed executive actions to implement parts of the stimulus package – though it is uncertain if it was legal to do so or even how much it would help. The expectation is a bill will get signed and the markets are expecting one. Forbes

Goldman 2021 Economic Prediction: As uncertain as conditions feel right now, Goldman Sachs analysts see much improvement in 2021. They expect at least one approved vaccine by year-end which will be widely distributed by mid-year 2021. With the increased optimism about a vaccine, they raised their 2021 GDP estimate to 6.5% with year-end unemployment falling to 6.5%. Their forecast predicts U.S. GDP back to its pre-pandemic level by Q2 2021. Yahoo Finance

Russian Virus Breakthrough? After positive preliminary results from early trials, the drug favipiravir received approval from Russia's Ministry of Health for use to combat the coronavirus. Hospitalized patients in the trials who took the pills recovered more quickly from the effects of the virus. The drug has been around for years and had been an effective treatment against several other viruses. Some experts criticized the approval stating data was not public and more trials were needed.  WSJ CNBC

The Path of Coffee: I am a big coffee drinker, probably a little too much! This article and chart outline the coffee supply chain and the path of coffee starting at the plant to finding its way as the hot elixir in your favorite morning mug. Cheers!   VisualCapitalist

Gut Microbes May Help Protect Against Alzheimer's Disease: A supplement that nourishes good bacteria in the gut seems to protect against Alzheimer's-like diseases in mice. The good bacteria are less inflammatory and there is growing evidence linking gut and cognitive diseases. Soon it will be tested in clinical trials. Some experts believe eating a varied diet or the Mediterranean diet may increase your microbial diversity and offer protection. New Scientist  Science Daily

TV Series "The Americans": Though it's been around a while, I recently started watching "The Americans" on Amazon Prime. The show is set during the Cold War in the early 1980s featuring a couple of Russian spies in deep undercover in Washington DC for decades. It has a great cast, strong writing, and the trip back in time is enjoyable as well. It was based on real-life events when in 2010 a Russian spy ring of long undercover agents was broken up in the U.S. One big difference between the show and real life? In real life, it doesn’t seem like the spies ever did that much! IMDB Quartz

Thank you for reading The Friday Buzz. Feedback is welcomed and please forward it to anyone who may enjoy the articles. Be well, take care, and stay safe!

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