Hello, David Frazier here, editor of the Bulletproof Wealth Report. Well, I told subscribers to our Bulletproof Wealth Report on October 27th that I expected stock prices in general to move higher regardless of whether Donald Trump or Joe Biden were elected as the next U.S. president
Since then, as of Thursday October the 5th the Dow Jones Industrial Average has risen by 926 points or 3.4%, the S&P 500 Index has advanced by 3.5% and the Nasdaq Composite Index has risen by 4%.
Now, the latest vote counts for the presidency indicate that Joe Biden will be elected as the next U.S. president, but that the Republicans will gain seats in the House of Representatives and maintain control of the U.S. Senate. I expect stocks to move in mostly a sideways pattern over the next few weeks with a slight bias to the upside.
However, I expect stocks to move lower during the year ahead and here’s why.
It has to do with the elections. Here are the positives and the negatives on the economy that will likely occur based on my research and more than 30 years of trading, investing and speculating in the markets.
First of all, we’re very likely going to see a return to globalization here in the United States instead of a focus by President Trump on the United States, and that’s because Joe Biden owes a lot of favors to Wall Street investment bankers who donated huge sums of money to his candidacy, and there’s a very good chance that Biden also owes promises to China’s government because China likely has a lot of damaging information about him.
Therefore, we’re probably going to see executive orders from Biden that get rid of Trump’s orders for U.S. firms, at least during this pandemic, to not hire workers from abroad, and we’re probably going to see — I’m talking about big technology firms primarily — we’re going to also see these big tech firms therefore begin to increase their labor forces with a lot of people from China as well as under other parts of the world, and they’re going to be able to pay those employees substantially less money than they would need to pay Americans to do the same jobs.
So the expenses of these big tech firms is probably going to go down and their profits are probably going to go up under a Biden presidency.
Secondly, in the relative short term, meaning for maybe six months into the year 2021, we’re probably going to see some positive results from the very strong likelihood that Joe Biden’s gonna get rid of the tariffs that Donald Trump placed on China and other foreign countries, and we’re probably not going to see any new tariffs imposed on those countries.
Therefore, the prices that Americans pay for imports from abroad will go down, and that’s going to be stimulative to the economy, meaning they’re going to be increasing their spending because they’re going to have more money to spend if prices move lower.
However over the longer term, meaning nine months to several years into the future, Biden’s likely softness in the way that he interacts with government officials from abroad in terms of allowing those companies to take advantage of America, especially in terms of the manufacturing sector, I see that as being a big negative for the economy. So there’s our couple of positives for the relative short term and one negative.
Secondly, I expect Joe Biden, if he is in fact elected as the next U.S. president, to substantially increase government regulations of U.S. businesses. That’s going to be a big negative because it’s going to mean that the cost for these businesses to operate is going to go up and the profits are going to probably go down.
Lastly, the massive government spending that would have occurred had the Democrats taken control of the Senate, well, that’s not going to occur. So that that would have been a positive development over the relative short term that’s not going to likely happen.
Stocks I’m watching
So we mostly have, once again to review quickly, probably a sideways movement in stocks maybe with a short with a slight upward bias for the next few weeks due to investment banking firms, Wall Street firms, expecting a return to globalization and being able to hire cheaper labor from abroad. Tariffs will likely go away, and that’s going to be a positive for the short term but we’re probably going to see a lot more government regulations of U.S. businesses. That’s going to be a big negative.
So therefore I expect the U.S. economy to weaken during the year ahead and for stock prices to move lower during that year ahead. However, regardless of what the economy does and what stocks in general do I’m extremely confident that our Bulletproof Wealth Report will continue to perform well and that’s because you know I’ve been doing this for more than 30 years, that is, investing and speculating and trading the markets and I know how to make money and help others make money regardless of whether stocks go up or down.
One stock that I discussed in a video that I produced on November 2nd is already up 9.3% in only four days and I expect it to double in price during the year ahead. Probably early next week I’m going to discuss in a video another stock that I expect to double during the year ahead.
So I thank you for listening and watching and if you’d like to make money in the markets regardless of whether the broad stock market indices move higher or lower, I encourage you to give us a try. You can sign up for a trial basis at absolutely no cost and if you do sign up and decide to keep your membership it’ll cost you less than $100 a year.
Thank you again and I’ll speak with you again soon.