Thursday , February 29 2024
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The election is here and this is my market outlook.

Summary:
Yesterday in my MMT Trader report I said that the October market correction was over and we'd see an election rally and a sizable surge in bullish sentiment.Separately, fiscal support remains too strong to be bearish on the economy and stock market right now, but there's more to it.Starting from the market bottom in late March through the rise to new highs in the averages, sentiment remained bearish. I couldn't fathom why. However, in the last few weeks as Biden surged in the polls and talk of a "blue wave" percolated, I started to notice a shift toward a more bullish outlook on the part of investors.My reading of this is that investors are waiting...hoping, for a change.A Biden win will trigger a surge in optimism and you will see stocks rally. Bullish sentiment will skyrocket.The "end

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 Yesterday in my MMT Trader report I said that the October market correction was over and we'd see an election rally and a sizable surge in bullish sentiment.

Separately, fiscal support remains too strong to be bearish on the economy and stock market right now, but there's more to it.

Starting from the market bottom in late March through the rise to new highs in the averages, sentiment remained bearish. I couldn't fathom why. However, in the last few weeks as Biden surged in the polls and talk of a "blue wave" percolated, I started to notice a shift toward a more bullish outlook on the part of investors.

My reading of this is that investors are waiting...hoping, for a change.

A Biden win will trigger a surge in optimism and you will see stocks rally. Bullish sentiment will skyrocket.

The "end game," however, will be different than most people expect, I believe.

That's because Biden is no progressive. He's a fiscal hawk. There's a long history of his advocating for government spending cuts and "fiscal responsibility."

That means there won't be any big stimulus under Biden. More importantly, I believe, he will take the Bill Clinton path and look to rein in the deficit.

This will set up an important top in the stock market and the economy will slide into deep and lasting recession.

That's my outlook.

Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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