VRA Special Election Update. The Markets Forecasting a Clear Winner. VRA Debate Analysis.
/Good Friday morning. In this Special VRA Election Update we are focusing on market signals that may be pointing to either a Biden or a Trump win. Observing the action in the markets and key sectors, historically, global investing patterns and trends have served as an important “discounting mechanism”. A high probability predictor of the near future.
Our Question: Based on recent market action in key sectors, which candidate appears to be favored?
First, what we know about the two candidates;
-Trump is a pro growth, smallish government, low tax, laissez-fair capitalist.
-Biden is a big government, high tax, income distributer that focuses on expanded social programs.
Few, on either side we believe, would dispute these descriptions.
With this in mind, lets take a look at our key VRA Investing System sectors/markets and the election signals they appear to be signaling, based on recent action:
ONE: 10 Year Notes/yield
Over the last 3 months, the yield on 10 year notes has risen from .53% to todays .79%. While this may appear to be a minor move, based on the change in yield we’ve seen a 49% move higher in 10 year paper.
The US economy would almost certainly be stronger in a Trump economy. Stronger economic growth equates to higher interest rates.
Election Signal; we believe that higher debt yields point to a Trump win.
TWO: Gun Stocks
Biden/Harris (the left) have long made it clear that they would be unfriendly to the 2nd Amendment. Were the 2nd Amendment going to be under attack, US publicly traded gun stocks should be soaring in price (especially as gun sales are at all time highs).
Analyzing the two largest US weapons manufactures, we see significant weakness. Strum Ruger (RGR) is down 27% from its yearly high with Smith & Wesson down 23%.
Election Signal: we believe that lower gun stock prices are pointing to a Trump win.
THREE: Housing
The US housing market is on fire, with HGX (Housing Index) consistently hitting ATH after ATH.
Election Signal: as a key VRA System leading economic indicator we believe the strength in the housing market is pointing to a Trump win.
FOUR: Transportation
The transports are on fire. Soaring economic strength is occurring in rails and trucking, with the Dow Transports consistently hitting ATH after ATH.
Election Signal: as a key VRA System leading economic indicator we believe the strength in transportation is pointing to a Trump win.
FIVE: OIL
Oil prices have been remarkably flat over the last 3 months, hovering in the $40 barrel range. Because we know that Biden, a supporter of the GND and Paris Climate Accords, would act to limit/eliminate fracking and ultimately the use of fossil fuels, oil prices would almost certainly soar.
We also know that, for many/most alt energy sources to compete with fossil fuels, oil and gas prices would need to skyrocket in price in order for solar/wind/etc to be price competitive.
Election signal: with oil prices remaining low, we believe this points to a Trump win.
SIX: Action in the Stock Market
Since WW2, the action in the Dow Jones over the final 3 months of a presidential election has determined the winner 87% of the time. If the market is higher over that 3 months, the incumbent wins…and vice versa.
From the beginning of August to today the Dow Jones is up 8%.
Election Signal: we believe gains in the Dow Jones are pointing to a Trump win.
VRA Bottom Line: in putting together this analysis we used only “major market indicators” that may be tipping us off to who the winner might be. The investing markets are the planets best discounting mechanism. The best predictor of the future.
We believe the signals are crystal clear, at least to this point; Donald J Trump wins re-election.
The Wayne Root Show
On Wednesday I was on the Wayne Allyn Root Show and covered in depth our “Six Major Market Signals” forecasting the winner of the election, based on our work above.
Thanks again to the great Wayne Root for having me on is show. The last time I was on, Senator Ted Cruz was on just before me. Last night, it was Trumps right hand man on business, Peter Navarro. Wayne always gets the best guests. And he committed last night to playing a leading role with us in VRA Conferences. Wayne was at EVERY major event we did in WMI. Never missed one. Our most popular keynote speaker, by far. Standing ovations that lasted many minutes, the norm with Wayne.
https://soundcloud.com/user-640389393/kip-herriage-live-on-war-now-presidential-election
Final Presidential Debate
The debate last night was far better than #1. Moderator was very good. Both candidates had a good first 30–45 minutes…I thought Biden surprisingly good.
But those last 45 minutes for Biden? Wow…complete train wreck. Commonly heard in the media was that Biden faded fast…made crucial missteps…and this is the first time I remember seeing this throughout social media; “Biden looked like he was sundowning” (commonly attributed to people with dementia, after the sun sets).
Biden’s worst moment, certainly for energy producing states? His comment that he would do away with the oil industry; “yes I would, they pollute!” (as if the production of wind and solar does not). Then claiming he has never said he would ban fracking (he has, on several occasions, as has would-be President Harris).
Equally bad I thought, his inability to defend his aggressive support of the ’94 crime bill that locked up 10’s of 1000’s of young black men. He made it even worse when he claimed that he and Obama weren’t able to pass criminal justice reform over their 8 years because “there was a republican congress”. What a whopper. R’s tried to pass CJ reform…but Obama/Biden and Dems BLOCKED it.
And maybe Bidens worst stretch was on the subject of CV lockdowns. It is crystal clear, based on Bidens response last night, that we would go back to nationwide lockdowns in a heartbeat. Trumps statement” “Joe, most people have to move forward. They cannot survive being locked down without jobs. Not everyone can hide in their basement like you do. You know, as the president I would love to lock myself in the basement some days, but I cannot do that to the American people. We are NOT going back to lockdowns!”
Biden had nothing to add…brutal segment.
The Polls
I have looked all over the internet and cannot find a single poll…polls of size that actually post their vote totals from social media…that give the win to Biden. Most had Trump winning in the 75–90% range. Hugely telling that CSPAN, CNN, Telemundo, Drudge Report…many more…chose not to even do online polls. Wonder why?
We referenced these polls after the first debate. Each gave Trump a blowout win last night.
Trump won last night…not close. And in the crucial swing states that Biden had to perform well for, his positions last night hurt him. Now, he has 12 days of answering questions about the Biden Crime Family. Can he afford to be “basement Biden” over these last few days?
Until next time, thanks again for reading…
Kip
Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/17 years.
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