Your Monday Blip 11/2/20

Your Monday Blip 11/2/20

Stocks opened the trading week with a move higher as the Dow gained 423 points to close at 26,925 on lower trading volume. The tech heavy NASDAQ meanwhile closed the day with a small loss. All eyes are on the election and I can hear Carlie Simon singing “anticipation” while investors hold their breath waiting for the results. IBD has moved to “market in correction”.
Isaac “the Fearless” and the good folks at BTS (not the Korean boy band) have moved their funds to 100% cash. About three weeks ago BTS was 100% in high yield but then gravitated to treasuries and finally to cash as volatility increased while market assets were fully priced. When looking at how the Dow performed just prior to the 2016 election, volatility was low and the Dow traded in a tight 300 point range before jumping over 5% after the election. This time however volatility is high and the Dow has corrected almost 6% in the last two weeks. Where it goes from here is anyone’s guess.
The US ISM manufacturing index jumped to 59.3 for October coming in well ahead of the prior level of 55.4. New orders jumped to 67.9, supplier deliveries rose to 60.5 and employment went from 49.6 to 53.2. Any reading above 50 indicates growth. Comments contained in the report were that business was robust, sales greater than expected and costs pressures were modest. The report also noted that October’s order books were at the strongest levels in six months.
The Scout Eagle project went very well. We had 15 lunkheads with shovels show up and they made fast work of the rock pile. We came up short of gravel however and Salmon Bay Sand & Gravel will drop another load later this week. After that the scouts will tamp the area and call it good. I must say that area looks really good compared to what it was when this project was started.