Political Impasse Risk

Updated: Dec 21, 2020



We continue to see a downward trend regarding COVID-19 in the United States; however, a recent increase in cases, mainly from a rise in testing, has occurred over the last week. It is possible that the lower outside temperatures caused a spike in cases, but the U.S. has still experienced more cases thus far compared to other regions. There is evidence of indirect deaths because of the lockdowns, too; in other words, additional people are dying from the lockdown along with the virus. 

As the election quickly approaches, there is significant risk of political turmoil from to mail-in-voting, as well as the recent death of Ruth Bader Ginsburg, which left the Supreme Court justice position vacant. 

Gross Domestic Product and Unemployment

There was a pause in GDP growth as unemployment is not improving as quickly as was hoped. Due to unemployment still being over average, additional stimulus. Small businesses are continuing to close, and a few are up and coming. Retail, restaurants, and other service-related business keep getting hit hard, putting a drag on the number of people employed.


Money Supply & Dollar Cost Averaging

Money supply continues to decline, and I am beginning to see weaknesses in money supply growth at a pace greater than could have been previously foreseen. Therefore, we expect a softening in capital markets; however, there is enough growth to continue having an inflationary effect.

While money supply decreases, the dollar is bouncing off of a technical resistance, and gold and precious metals are selling based on news. We continue to monitor the positions, but markets do not move in a straight line.

Follow GWS on YouTube

For the full video recap of the webinar on which this blog post is based, follow GWS on YouTube. (If a recent episode isn’t posted there yet, it’s still in compliance review). And be sure to tune in to our weekly Gatewood Wealth Solutions Market Webinar to hear updates on the current state of the market and economy. As always, we welcome you to share our broadcast links on social media or with your friends and family. They are more than welcome to listen in and learn our perspective on the market and the economy.

If you have any questions, please contact your Lead Advisor or any other member of our team. We are here for you.

Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risk including the possible loss of principal. No strategy assures success or protects against loss. Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.

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