Election Eve, ISM impresses, oil rebounds, gold higher on election risks .
Investors place their final pre-election bets as both President Trump and Democratic nominee make their final blitz at key battleground states. The conviction behind the bets are small considering no one can say for sure how the next 48 hours will unfold. Much of Wall Street is still preparing for a blue wave that explains the October outperformance with many of the beaten sectors and the struggle with big-tech. It is easy to make the argument that one has to be bullish stocks regardless of the election outcome: The Fed is keeping rates near zero and they will likely be one of the last central banks to raise rates. The race for a COVID vaccine and treatments should have some winners in the next couple of months and that should provide optimism that the global economic recovery will only get better starting now.
The commonly used forward PE ratio shows the SPX is currently trading at over 24x, on par with the 2000 bubble peak. Meanwhile, longer-term valuation metrics such as the cyclically-adjusted P/E ratio show the SPX to be on par with levels seen at the 1929 peak, marginally cheaper than 2000 levels.
Price Levels:
3,364.92 Pivot Point
3,354.62 38.2% Retracement From 4 Week Low
3,354.10 38.2% Retracement From 13 Week Low
Investors place their final pre-election bets as both President Trump and Democratic nominee make their final blitz at key battleground states. The conviction behind the bets are small considering no one can say for sure how the next 48 hours will unfold. Much of Wall Street is still preparing for a blue wave that explains the October outperformance with many of the beaten sectors and the struggle with big-tech. It is easy to make the argument that one has to be bullish stocks regardless of the election outcome: The Fed is keeping rates near zero and they will likely be one of the last central banks to raise rates. The race for a COVID vaccine and treatments should have some winners in the next couple of months and that should provide optimism that the global economic recovery will only get better starting now.
The commonly used forward PE ratio shows the SPX is currently trading at over 24x, on par with the 2000 bubble peak. Meanwhile, longer-term valuation metrics such as the cyclically-adjusted P/E ratio show the SPX to be on par with levels seen at the 1929 peak, marginally cheaper than 2000 levels.
Price Levels:
3,364.92 Pivot Point
3,354.62 38.2% Retracement From 4 Week Low
3,354.10 38.2% Retracement From 13 Week Low