The Stock Market and Gold are Up, Why?

Mish

Let's investigate claims as to why the market does this or that.

 Claim of the Day

Here's the claim of the day: Wall Street Opens Higher as Faith in Stimulus Persists; Dow up 130 Pts

Reality

No one really has any  idea on most days why the market does this or that.

It's likely the market and gold are both higher not because of any deal between House Speaker Nancy Pelosi and president Trump, but for something not so obvious.

If the market falters this afternoon there will be another reason perhaps the opposite: Market down as stimulus hopes fade.

What About the Election?

It's entirely possible the market the market lately has been pricing in a Biden victory and is happy about it.

After all, some 3,500 corporations will be happy to get rid of Trump tariffs that have totally backfired.

For discussion, please see 3,500 Corporations So Fed Up With Trump's Tariffs They Sue the US

Is that the reason? 

I don't know, but it is as least as good a reason as reasons provided in headlines every day.

The market can go up or down for many reasons or no reason at all. 

But looking ahead, a Biden victory coupled with increased deficits rates to be good for gold.

Mish

Comments (40)
No. 1-19
Rbm
Rbm

Maybe softbank again. See zerohedge

IA Hawkeye in SoCal
IA Hawkeye in SoCal

The United States of America has a printing press that no one in the world can match. Period. I don't believe we will be "taken down".

PecuniaNonOlet
PecuniaNonOlet

Next week, UK will reach the “line of death” Brexit talks. It occurred to me that it is a great experiment. If the UK is successful post Bexit, it will signal the world that “isolationism” works. If the the UK is unsuccessful, it will signal that globalism is here to stay.

In either event, the US stock market and gold have always been safe havens for money since there arent too many places to go. Lets see what happens next week and the following months.

Flatlaxity
Flatlaxity

If what I'm reading is correct, the market is currently forecasting a Biden win and a big stimulus, probably happening during the lame-duck session. As far as gold, it's an enigma. It's a small maniputable market (ala the JP Morgan action and $Billion fine) that should be higher, if only to reflect the higher amounts of Fed money created - whether going into assets or much less into GDP creation.

Woodturner
Woodturner

It’s because the moon is in the seventh house and Jupiter is rising. Or, who the heck really knows other than in hindsight.

jfs
jfs

Gold and stocks are up, because of me. I'm an old-money trillionaire who's been buying. I'll wait till everyone's all in, then I'll sell.

Idabread
Idabread

Mish could you comment why you are so sure there will be no stimulus before the vote?

davebarnes2
davebarnes2

Strawberries.
The market is up today because of strawberries.
The market is down today because of peaches.
Those 2 statements make as much sense as Bloomberg's headlines.

Bam_Man
Bam_Man

Stop calling it a “market”.
It is an electronic, Federal Reserve-controlled policy tool and wealth-redistribution mechanism. Nothing more.

FromBrussels
FromBrussels

Because investors, totally fed up as they are with C19, are completely ignoring the second wave.......Even algos seem to be clueless these days....

KidHorn
KidHorn

Gold is likely up because USD is down. Equities? who knows?

Rocky Raccoon
Rocky Raccoon

Trump built that... LMAO

Maximus_Minimus
Maximus_Minimus

Stock market is up because stock can only go up with the money gushing from all orifices: fiscal, monetary, and regulatory.
Also, they trust that morons will be in charge in economic and political positions.

Dodge Demon
Dodge Demon

The Omaha Of Oracle buying?

Scooot
Scooot

Stocks are up because of FOMO.

Gold is up because the risk of holding anything else keeps rising whist yields keep falling.

Captain Ahab
Captain Ahab

Can we rephrase Mish's question about stocks and gold?
Why do Wall Street firms support the Democrat Party?

Some reasons might be:
They believe Democrats policies reflect their best interests.
Higher taxes are existentially 'better' than lower taxes.
The Green New Deal will generate massive economic growth, with far greater energy efficiency than carbon/nuclear forms.
It's all about insurance.

Either Rep or Dem, money flows. Neither side can afford increasing interest rates and crashing bond/stock markets. Wall Street can't lose. Ergo, stocks go up. Gold is up because global economic implosion draws steadily nearer.

long memory man
long memory man

Super thought, the USA has been in default since 1972, you got a Mona Lisa? print a trillion then see what she is worth. Good luck with that. I suspect you can no longer export your inflation, its going to get you.


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