S&P 500, Dow Industrials Fall Short of Record Closing Highs As Political, Economic, Medical Pressures Mount

Wednesday's 27-point rise on the S&P 500 left the broad index just below its record close of 3,580.84, attained on September 2nd of this year, leaving the S&P less than three percent from a record mark.

The index came close to the record intraday, hitting 3,581.16 mid-afternoon, but late day selling prevented a record close.

The Dow Jones Industrial Average was poised to reach a record closing high, but failed to do so, losing 23 points on the day, seeking a close above 29,551.42, the level it closed at on February 12, just prior to the late winter corona-crash.

Stocks came under pressure late in the session as Monday's rally, spurred by the potential Joe Biden presidential victory and Pfizer's announcement of successful COVID-19 vaccine testing began to fade as President Trump ramped up efforts to overturn unofficial counts in Wisconsin, Pennsylvania, and Michigan. The president was awarded North Carolina and Alaska during the day, pushing his electoral vote count closer to the necessary 270 needed to retain his position as leader of the free world.

Georgia's too-close-to-call presidential tally triggered an automatic recount and Wisconsin is within the one percent threshold for a candidate to request a recount. Outlier counties include Dane and Milwaukee, which include the cities of Madison and Milwaukee, where Joe Biden took 76 and 69% of the vote, respectively. The results appear skewed, as Trump won handily in other Wisconsin cities, Green Bay, Waukesha, Appleton, and Racine. Biden's lead is just over 20,000 statewide.

Just the fact that Trump is calling for recounts and has filed suit in various jurisdictions raises the specter of fraud having been committed by parties loyal to Biden. Election results looked suspicious even the night of the election, after Trump won Florida, Ohio, and Iowa easily. Vote counting was suspended election night in Michigan, Pennsylvania, Nevada and elsewhere the night of the election. Democrats and the mainstream media insist that the president has no evidence of widespread voter fraud even though such evidence continues to pile up across the country.

Essentially, the remarkable stance taken by the media to shut down any questioning of a Biden victory simply does not pass the smell test. Biden, despite running a campaign mostly from the comfort of his basement and drawing sparse crowds (while Trump drew tens of thousands to rallies) at events, supposedly won more votes than any candidate in history, including surprassing the record set by Barack Obama in 2008. On the surface, that result stretches reality to a point of unbelievability.

Thus, Biden's media-imposed victory may have to at least wait a while, and the possibility that President Trump will eventually be declared the victor on December 14 when state electors are certified, is growing. With considerable doubt being cast on the election front, investors may take a wait-and-see approach and if it appears that Trump gains an upper hand, markets could reverse in a hurry.

On the vaccine front, following the release of Pfizer's rushed press release Monday, the shine is fading on their story. The vaccine in question has to be isolated and kept at a temperature of -112 Fahrenheit and experts suggest that widespread distribution - considering the logistical issues ahead - may not occur until later in 2021. Additionally, rising numbers of COVID cases are prompting many states to begin issuing renewed restrictions on work, travel and assemblies, a negative for the economy and stocks.

These factors are contributing to a healthy degree of reservation and skepticism on the part of investors, to say nothing of the high valuations currently offered on popular stocks. Adding to the worry wall is the upcoming holiday season, that, with retailers already having been splattered this year, may not be as brisk as some might like due to coronavirus fears and government restrictions, though it will likely be a huge positive for online retailers and delivery services.

Altogether, political turmoil, virus fear, crippling government actions, and slowing retail trade may be too much for an already frail market to handle, possibly resulting in a December like that of 2018, when a meltdown crash was averted by a phone call from Treasury Secretary Steven Mnuchin to Fed Chairman Jay Powell and his subsequent reaction.

As they say on the front lines, keep your powder dry.

At the Close, Wednesday, November 11, 2020:
Dow: 29,397.63, -23.29 (-0.08%)
NASDAQ: 11,786.43, +232.58 (+2.01%)
S&P 500: 3,572.66, +27.13 (+0.77%)
NYSE: 13,724.78, +16.79 (+0.12%)