Photo: Daniel Goodman / Business Insider
This is some interesting commentary from BTIG’s Dan Greenhaus on the investing climate:The consensus among the investors with which we’ve been meeting is that the most likely scenario now for equities is for volatile but lateral trading though the election (we agree more or less but note that the first half of next year could be worse than many currently anticipate). The S&P 500 failed at the 200 DMA, found no support at the 100DMA and broke below the 50DMA. We have been asking clients what the basis is for meaningfully and sustained higher equity prices and quite frankly, the only notable response we get is that “equities are cheap.” We counter by noting that multiple expansion is unlikely, margins are running out of steam and any hit to aggregate demand is likely to hurt profits more generally.
Further, with the government as dysfunctional as it is, headline risk is here to stay and that provides for a less than encouraging investing environment. Divided government is good except when something needs to get done.