"We think we're in the early stages of an economic cycle, and we think we're in the early stages of a bull market," Lerner said, talking to Yahoo! Finance.
Two things: One, it would be nice to finish the current economic cycle, the one that includes a recession and high unemployment, massive bankruptcies, and a commercial real estate bust. Two, don't trust advice or articles from any site purporting to be a finance portal that has an exclamation point in its name, especially the day before an existentially-impactful national election.
Lerner is advising investors to "lean into that weakness," whatever that means. He could just say, "buy the dip," but then he'd sound so pedestrian. He likes material and industrial stocks, also, regional banks, which isn't surprising, given that he is employed by one, via Truist/Suntrust Advisory.
Truist Financial Corporation was birthed in 2019 upon completion of the merger between Suntrust and BB&T, two regional banks serving primarily the Southeast with somewhat sketchy pasts. Both were the subject of fraud investigations and paid fines within the past five years. Now, the merger has made Truist the sixth-largest bank in the country.
While there may be some of the opinion that the corona panic was a one-off event that isn't likely to repeat nor cause lasting damage to economies, the measures taken in response to the virus have been far-reaching. Even now, some countries, especially in Europe, are re-instituting lockdowns and other measures that will surely crimp any economic growth and the future is largely unknown.
To the extent that a virus that effective kills only 0.01% of the adult population under retirement age, the draconian measures taken by advanced nations boggles the mind. In response, populations in France, Spain, Italy, and elsewhere have taken to the streets to express their outrage over having their lives turned upside down by government action that they consider excessive.
How the eventual drama plays out over the next six months is a matter of speculation, but one would be hard-pressed - with the exception of Mr. Lerner - to make the case for a speedy recovery and return to bullishness.
Of course, top of mind on this thrid day of November is the presidential election in the United States, which has shaped up to be a tight race that may take days, weeks, or even months before an actual victory is made official.
Democrats are dug in against President Trump, who has been making reference to the ultimate veracity of the results, suggesting in very strong terms that early, mail-in, and absentee voting - indirect results of the coronavirus scare - opened the door to cheating and voting irregularities. Legal challenges have been mounted on both sides, with more to come, for certain, but on Tuesday, voters will head to polling places to cast ballots that should be counted by later in the evening.
While most polls have Biden leading in important states, the margins are razor thin and polling was proven to be faulty in the last presidential election of 2016, when Trump pulled off a major upset of Democrat Hillary Clinton.
Largely overlooked, all 435 seats in the House of Representatives are being contested. A swing from a the Democrat majority earned in 2018 to a Republican edge would have profound effects on governance no matter which presidential candidate is chosen. In the Senate, Republicans seek to retain control of the slim 53-47 edge they currently hold, with as many as nine of their seats in tight races.
Whatever the outcome, participation this year is projected to be the best since 1990.
Wall Street's Monday rally took the form of a serious rebound from last week's drubbing, though the NASDAQ did not participate to any great extent. A solid cohort of market participants see an oversold condition and may have piled into some of the more beaten down equities on Monday, their motivation to be ahead of the curve when election results are announced Tuesday night. With futures pointing to another positive start in US markets, a continuation of the snap-back rally is being foretold. If the presidential election is not clear-cut and might be contested, they may be caught wrong-footed, especially if the race is too close to call in places like Pennsylvania, Wisconsin, North Carolina, or Georgia. Lawsuits could be flying to courthouses across various jurisdictions. Hope is that the Supreme Court does not have to be involved as it was in 2000, when they appointed George Bush the victor over Democrat Al Gore.
So much is riding on the presidential outcome that it's easy to envision a condition wherein markets could be whipsawed for weeks.
At the Close, Monday, November 2, 2020:
Dow: 26,925.05, +423.45 (+1.60%)
NASDAQ: 10,957.61, +46.02 (+0.42%)
S&P 500: 3,310.24, +40.28 (+1.23%)
NYSE: 12,662.17, +232.89 (+1.87%)
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