On Bloomberg Radio, Jeff discussses what he thinks has been driving the markets, and touches upon the impact of the pandemic, a new fiscal stimulus package, the elections, and US/China tensions.


[00:00:00] Chief Investment Officer Polaris Wealth Advisory Group in San Francisco.

[00:00:03] Jeff I’m looking at my terminal the S&P 500 has strung together its two worst weeks since March. How shattering calm that had largely prevailed for five months and then a closer look at the market trends particularly in the ability to hold above levels that denote upward momentum. This suggests Jeff and you know this that what has happened can be categorized as a correction to prevailing froth rather than a full blown reordering of set of sentiment. You know it’s it’s really remarkable because the S&P 500 ended little changed while the Nasdaq 100 fell for the fifth time in seven days to cap its worst week since March and the tech heavy Everyone’s obsessed with the tech stocks this week. That SAC Harvey index traveled 3 percent from high to low Friday and is 11 percent from its September second record.

[00:00:57] I say this to you Jeff because then I what’s happening in my neck of the woods here in Washington D.C. and Senator Richard Shelby a Republican from Alabama one of the establishment folks there in the know very in the know told reporters today and made some headlines in The Journal Politico.

[00:01:16] Bloomberg obviously on top of it and said that that fiscal stimulus may not be coming until after the election. Jeff what do you make of all this.

[00:01:27] I’m still I’m still laughing at the fact that they cut you off of being able to talk during the break.

[00:01:32] So know I know.

[00:01:34] Hey Jeff I hear you and I can’t even complain about it in the next breath because they can’t hear me. Go ahead.

[00:01:39] You’re stuck with us. But you know it’s funny because you were saying you know about how the S&P had about a week in the Nasdaq and so on. But I think that the thing that’s really true the most remarkable thing of all is just how much we’ve recovered from the lows given everything that we’re really dealing with. I mean if we were sitting down today and we hadn’t seen a recovery and we were talking about how the GDP had dropped its greatest amount that it ever had dropped in the history of a stock market that we’d had unemployment while recovering from this low point hit 1937 levels that we had earnings that have been dropping dramatically from the year before and wall predicted to recover a store or 15 percent 20 percent off of what their highs were from last year we wouldn’t be talking about making new time highs. And yet here we are. And so a lot of it it’s for me is all based upon something that it’s based upon the stimulus that you were talking about that already occurred back in March. It was also that there was this next shock coming be a a trillion or through year. I mean what’s the difference between a couple trillion on this front. But I mean you’re you’re talking about stimulus that’s being tossed around but unfortunately given the pandemic and in the situation that we’re dealing with we don’t have a choice. I mean if it doesn’t happen until after the election really I mean if you look at where career politicians are these days everybody is out there to reserve their own job in one way shape or form or another and if Republicans or Democrats regardless of which way you lean or unwilling to put the American people first. They will definitely be risking their future employment when it comes to elections.

[00:03:27] And you know I think that touches captures the sentiment perfectly because we are obviously in the national media are so focused on on the presidential but there’s these down ballot races that you know so many of these folks in Congress who are up for re-election whether it’s in November or two years from now or in a couple of years from now that they’re going to have to be really thinking about you know can they are they. What’s the return on investment for it for their constituents. Let me let me ask you if and what what does fiscal stimulus mean for certainty in the marketplace. If it were to come before before November 3rd is this sort of a given now that that the folks are recalibrating their expectations that it’s likely going to happen after November 3rd if the markets become become recalibrated to that.

[00:04:19] Jeff I don’t do those on hoarding at all. It would be a little more recent pullback that we’ve seen in the last week is sort of a realization perhaps it may not be coming on at the very least that it’s delayed and there’s beginning to be some worry that’s being driven into the marketplace. You know again to me when you’re looking at the original stimulus and really what’s being put out there we really don’t have a choice given the fact that the situation we’re in is completely covered related.

[00:04:53] If we’re in a situation you don’t have a pandemic then we’re not in a situation where we’re dealing with unemployment and people who are trying to make mortgage payments or make the rent for it know just keep their head above water if you don’t do it you’ve got a catastrophic situation or hands where people aren’t you know they’re out on the street you’re dealing with foreclosures and people that are being kicked out of their apartments and then the government’s going to have to pick up the tab there anyway.

[00:05:21] So it’s really kind of a lesser of evils to keep people in their homes with stability or do you know nature’s course take its course and put them out on the street and they’re still going to have to have loads of sleep and food to eat. And the government would still be responsible for doing that one way or the other. So to me not having a complete destruction of our entire financial world is the lesser of evils.

[00:05:48] Jack powers online Jeffers of course the managing partner and chief investment officer at Polaris Wealth Advisory Group out of San Francisco. Tick tock also back in the news today tick tock pushing forward with deal to meet looming deadline China’s bait dance is still considering bids from two possible buyers Oracle and Microsoft which have teamed up with Wal-Mart. The president is saying that that September 15th deadline is still very much in play. Just quickly Jeff why you. I mean about whether China factor in to the markets and U.S. China tensions are a factor into what we’re seeing on the street I mean it can every single time it seems like it’s kind of disappeared.

[00:06:31] It’s kind of like a game of Whack a Mole.

[00:06:33] It seems like it wants to rear its ugly head again for us and you know start to stir the pot a little bit more. I mean obviously it was everything to do with last year’s market and then just when we think that we’ve got enough on our plates between pandemics and a disastrous economy then we start having fights with our neighbors about things like Texarkana.

[00:06:55] It seems pretty silly given a bigger scheme of things that what we’re dealing with but it’s obviously a real thing. I mean between the Chinese coming out a few weeks ago and saying that they wanted to actually become much less dependent upon the United States with regard to chip manufacturing well they actually didn’t name us directly but they said foreigners of chip manufacturing which was obviously directed directly at us. And it’s in direct relation to who won and took tock and other things that we seem to be wanting from us with them about. So does it come into play. Absolutely. I mean again I think the Chinese look at politics a little bit differently than we do when Premier she has a life subscription and his position where obviously all he has to do is wait until November to see if Donald Trump is going office or not.

[00:07:45] And then to see what we’re going to see with the next president if he’s not in office. So that’s why I think that you’re going to see some yeah some heating up.

[00:07:53] And that’s why I thought the front page of The Journal that I have right in my hand Biden’s pledge on China looks a lot like Trump. Something tells me this is the one area of agreement on national security between our nominee Biden and President Trump. Hey Jeff stay safe out there in San Francisco with all the fires we’re thinking of everybody out there Jeff Power managing partner and chief investment officer our Polaris Wealth Advisory Group in San Francisco. Coming up we talk.