Election Season Perspectives

Some points to consider:

Election
Markets tend to experience greater swings until presidential elections are decided. Uncertainty from the pandemic and Trump indicating he will contest a loss may further increase market volatility until a candidate officially concedes. The last contested election (Gore v Bush) led to a market drop and a slow economy until the election was eventually decided in December.

COVID
Currently 48 states are experiencing a significant increase in infections which can lead to shutdowns, drops in consumer confidence, and companies limiting their spending.  The statistics I watch to understand the rate of spread are not painting a positive picture, even with advances in treatment. If you are interested, I have a more detailed example below.

You can view transmission rates at https://rt.live/

The effects of the next wave may be significant, but the economy and stock markets have always recovered to higher levels.

What about more shutdowns and stimulus?
We came through the first shut down and rebounded in a sharp V as expected. We must keep in mind that the markets were buoyed by the Federal Stimulus (PPP, $1200 checks, SBA Loans). It may be some time until we know the victors of this election and the corresponding fiscal policy they adopt.