Got a trade away with the breakout above the recent top formation.
Stimulus #2 is only the beginning.
Things to consider other than the dire macro environment of debt vs GDP and negative real rates:
Potential for the democrats to win the Senate race. Lets say 50/50 because Trump is hurting voter turn out and there is already 1M votes cast, which historically is very high but more importantly points to Democrats leaning into the race. Lets see if the distrust narrative Trump has cast will be the difference.
If the above does not eventuate, the Democrats will sidestep Congress and therefore the Senate and use the FED to drive additional stimulus. It will be interesting to see exactly how they get a monetary function to drive a fiscal outcome, but with so many states and municipalities being reamed with revenue downturns, the Democrats don't have much option other than to find an alternative. If the Republicans hold the senate, they will only continue to obfuscate and deny progress.
Jay Powell and Janet Yellen are birds of a feather. The agree on the strategic and tactical approach to 'saving' the country and that is stimulus via the FED/Treasury mechanism.
Without the above occurring, and the US driving down real interest rates and driving up inflation, they have no way whatsoever of servicing the giant interest bill. Then there's the massive corporate debt bubble from years of cheap money and very loose capital re-investment (income generating). The executives and hedge funds (as usual) got to greedy by engineering larger and larger dividend returns or executive bonuses. Its really a 'music stops' scenario which is likely to end in tears, but not quite yet as financial and hard assets, along with PMs will run hot a while longer - don't fight the FED.
IVR Price at posting:
6.9¢ Sentiment: Buy Disclosure: Held
