Recovery will be slower without additional stimulus, but more aid may require cooperation between democrats and republicans. Mindaltering drugs, is it time to invest in pot stocks . Ben levisohn, carlton english and reshma. Ben, voters are always half unhappy, half happy after an election, but investors were clearly gleeful, and the market was up 7. 5 , almost 7. 5 , its best postelection return since 1932. Break it down for us. Yeah. I mean, its a new narrative going around the market now. Before the election it was all about the blue wave and how you were going to get this massive stimulus thats going to drive the market. Now its about glued lock, that were not gridlock, were not going to get tax increases, massive spending, but without the tax increases, everythings going to be okay. Were basically going to have status quo with some small changes around the edges, and you could even get lucky e and see a little cooperation between biden and mcconnell who knew each other from years in the senate, actually worked together when biden was the Vice President and mcconnell was in the senate. So theres actually a lot of optimism that gridlock is going to be good. [laughter] jack i remember that word, cooperation. Havent heard it in a while, but i do remember that term. What are you looking for in the next few weeks . I really think this is more about the economy, that weve been seeing the data come in, and its fantastic. The Manufacturing Survey was great showing continued growth, our payroll report today, the Unemployment Rate dropped. The economy is just fantastic at this point. Not fan tsaing e, i fantastic, but its recovering a lot faster, and if we keep it up, there are going to be good things ahead for the stock market. Jack its true that there were other things happening in the market other than an election, this week, erik reshma. For starter, the fed did not want to make waves, but investors were reasonably happy with what came out of that meeting. Yeah. They went out of their way to reiterate support for continued stimulus and indicated they have more tools to help thats definitely given investors comfort. But the fed officials did also warn of considerable risk to the economy for the surge in coronavirus cases that were seeing. You know, we hit a grand new daily record here in the u. S. Of 120,000 reported infections. And the fed genre it rated the need for another stimulus package. Its fallen on deaf ears, negotiations at a stand still before the election. And now the 3 trillion package the democrats had wanted is likely off the table. But both leaders of congress did say today that they would kind of restart negotiations. I guess that, you know, if the election is even if those guys get an agreement hammered out, we could see a delay in stimulus. Jack and fridays job numbers came in better than expected. I think we lost about 20 million jobs, weve got 10 million back. Thats a positive, right . That is a positive [audio difficulty] and optimism here. There are other signs that show we may be losing some in the recovery and that, perhaps, sort of worried that in the medium term if with dont see some sort of stimulus, the market is not really factoring in the possible hit to the economy. Small businesses are still suffering, there are concerns if we we dont see more stimulus, we could see another wave of layoffs in november and december. Blackrocks bond guru says growth could vary by several Percentage Points based on what type of stimulus we see. And then, of course, there is the coronavirus risk not just here, but also in europe. Weve seen new restrictions put into place in france and germany and the u. K. Not as strict as before, but still raising concerns of potential double dip in those parts of the world. Jack thursday was the worst single day in this country for new cases. Or carlton, if all of this drives you to drugs, you are in luck i think it was arizona, south dakota, new jersey remind me, one more recognized Recreational Use of marijuana. Mississippi said medicinal use was okay. How can this help investors . Finish. So montana was that fourth one you were talking about. So it was kind of interesting in the trading this week because initially i think those cannabis investors had expected a blue wave. When that didnt quite seem to be happening on wednesday, those stocks sold down. But on thursday as joe biden started to take the lead, the stocks rebounded. And the reason behind that is a joe biden presidency, even with a republicancontrolled congress, might be one that can pass banking reform that will help some of these Cannabis Companies grow. If you remember, cannabis is still federally a class i drug, so that means banks face a number of compliance issues, many of the larger banks have stayed away for that reason. So any measures that pass, that, you know, would help, would certainly help the cannabis industry. Now, it is worth noting that even though those states are allowing Recreational Use, us typically takes some time before you see that retail rollout. Its usually around 18 months. And for investors it is a volatile sector to involved in. A lot of these stocks do often look expensive, but in light of tuesdays voting on green thumb and Harvest Health are some that are poised to benefit. Jack it turns out that if pots not enough, mushrooms may be coming back, used for depression and Everything Else . Yes. So i encourage everybody to look at the piece by bill alpert. There are some publiclytraded companies that are investigating this. Again, or t an area of caution, but bill wrote a really fantastic piece that i urge everyone to read. Jack we will all check it out. Coming up, what the Election Results could mean for your harold twelve hundred strings of lights. betsy quarter mile of tinsel. harold and real snow all the way from switzerland. betsy hmmhm. Gonna be tough to top. betsy well played. vo add some thrill to your wish list. At the season of audi sales event. Get exceptional offers now. Wondering if you need detox or an Inpatient Program . Lcohol facility . How is dual diagnosis treated . Your treatment stay could be covered by most private insurances. Call now. You will be connected to an accredited treatment facility, that is ready to answer your questions. You have the power to make a fresh start, take the first step and call. Jack every election creates new allies and new animosities. Understanding whats happening behind the scenes can help investor prepare for next year. Few people are better plugged in than john emerson, Vice President of Capital International who served as u. S. Ambassador to germany from 20132017. John, it is great to see you again. I know its been a crazy 72 hours for you, so lets just dive right in. I want to start with an interesting dynamic. While joe bidens odds look pretty good at the top of the ticket, when you go down ballot, it was actually the republicans who had a better election. Well, i think thats right and very first of all, thanks so much for having me. And thats a very interesting point. It appears that, and you will need to know more from the exit polls, but it appears that a lot of voters who voted democratic in 2018 as a way of expressing displeasure with donald trump, now they had the opportunity to directly express their displeasure with donald trump, and so if they were republicans, they went ahead and voted republican down the rest of the ballot. So i think we need to examine that more, but it does appear to be an interesting dynamic of this particular campaign. Jack and at this point, what youre actually focused on is the georgia election. Can you explain that . Well, georgia, i think, will be close in the president ial, but whats really interesting because, honestly, the way the numbers are looking, joe biden doesnt necessarily need the one in georgia to be elected president. Whats really interesting is the fact that both Georgia Senate races under georgia law are require 50 for someone to be elected. If they dont get the 50 , they go on to a runoff, the top two candidates, on january a 3th. January 5th. And lo and behold, current lu you may well have two senate races as runoffs on january 5th. Why that important . Its important because the democrats needed to flip two more senate seats in order to gain control of the United States senate. Is so consequently, if both seats, both races are thrown into a runoff on january 5th, we will have a race for control of the senate and, boy, will that be a doneny brook. [laughter] jack absolutely. Lets assume for the sake of argument biden wins the presidency but doesnt sweep in georgia. The Business World is going the to be watching carefully to see cabinet appointments, especially commerce and stuff like that. How to you see that coming together . Commerce, treasury in particular if, maybe even defense and some of the other positions will be of great interest to the Business World. I mean, look, joe biden has pledged he wants the most diverse cabinet in history. I think he will honor that pledge. But he also clearly is going to want an experienced cabinet and a group of people who can really hit the ground running in terms of getting into office and pushing forward with his agenda. But the intriguing aspect of having a democratic president with a Republican Senate is Mitch Mcconnell. If he can hold his, at this point it looks like it would be a 5248 Senate Majority in the democrats dont pick up anything in georgia, if he can hold that, theres going to have to be some deal making done in order to get top appointment positions confirmed. And this goes for judges as well. So you might think that thered be more of a tendency towards people who are, the republicans or at least a handful, enough republicans to put them through their nomination their confirmation process will be comfortable with in the appointments process. Jack so tell me more about the mcconnell dynamic. Can he and biden actually Work Together . Are republicans too poisoned right now . Can they Work Together and get something done in the next few years . Joe biden has said on multiple occasions he wants to be the president of all americans. Not just the democrats, not just the americans who voted for him, but all americans. He wants to be a unifier in this country. And hopefully well see that in some republicans. Now, you know, Mitch Mcconnell famously said when barack obama was elected, his job was to make sure he was a oneterm president. But i think one thing we can be encouraged about is if theres anything that just about every republican and every democrat on capitol hill agrees with, its that they like joe biden. They know hes a decent human being, hes a good listener. Theres a sense that he will take their concerns into account. And over his long experience in the senate and as Vice President , hes had a real proven track record of being able to pull together from both sides of the aisle majorities, legislative majorities. So hopefully well see them have some things they can work on together. First and foremost, a great big, robust stimulus package. Jack two more questions. One is any funny business going on in the polls . Youve been watching this for decades. Should we be worried about that and, secondly, hows American Funds Capital Group suggesting we position our portfolios . Well, on the first one, the answer is absolutely not. Everything thats happening, we knew it was going to happen. We knew that 70 of the democrats were going to vote absentee or i by mail partly because of concern of covid. Donald trump was telling his supporters not to vote by mail and to vote on election day. Ballots are typically counted first the ones on election day, then the ones by mail. So what we see happening in astronauts like pennsylvania and georgia states like and georgia and nevada and arizona, completely expected, completely predictable, nothing wrong with that whatsoever. In terms of Capital Group . We want people to really remember dont confuse or mix your politics and political beliefs with your portfolios. The fact of the matter is markets tend to do well whether its a democrat or republican in the white house over time. And whats much more significant in terms of client portfolios are going to be things like the actions of the fed, whether and how quickly we get a vaccine to this virus and how quickly it gets disseminated. And then, of course, the fundamentals, which companies are going to do well as we come out of the covid situation, whos positioned to do well, who are the winners and losers likely to be. Those are the kinds of things that the analysts and Portfolio Managers that we have all over the world are looking at on a daily basis. Jack john emerson, thank you so much. Those are important points, and were going to be talking about them next whether youre looking for a safe haven or opportunities in the markets when youre through with powering through, its time for theraflu hot liquid medicine. Powerful relief so you can restore and recover. Theraflu hot beats cold. [male narrator] for as long as weve existed, Boys Girls Clubs has always been about coming together. To support the families of our communities and do whatever it takes to give every kid a chance at a great future. But were going through a challenging time right now. And while we may not all be able to come together in the same physical ways, in other ways, were coming together like never before. Because thats what whatever it takes to build great futures means. It means providing a safe place to go for children whose parents are on the front lines battling the virus. It means providing millions of meals for kids who previously relied on their school or a meal program which are now shut down. And its about harnessing the power of technology to keep kids moving forward with their education. So yeah. Whatever it takes to build great futures may mean Something Different right now. But whatever it is, thats exactly what were going to keep doing. Adapting. Innovating. Lsetting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Jack weve seen huge moves in the market over the past week, mostly in the direction that investors like, up. But how should you position your portfolio now . To help answer that question, were joined by alex youll. Thanks uhl. Reshma, i want to start with you. If investors are nervous about what comes next, how can they hedge their Stock Holdings . Sure. Theres a down potential buffers. Theres, obviously, treasuries or Investment Grade corporate bonds, you can pair those with etfs. Gold, of course, holds up especially during periods of panic. And another safe haven is japanese yen which really did well during the march selloff, and you can get exposure through that, through an etf like fxy reshma, can i just jump in i want to put out a strange one, tech stocks. We saw on wednesday morning that they just soared, up 4 . I really, in some ways, tech stocks have become the ultimate safe haven. Jack thats a really interesting dynamic because bonds really are priced to give you, at least the 10year treasure true, no return after inflation. So, reshma, if you want to maybe have a lower multiple on your stocks, where might you invest . Sure. So, actually, good point on the tech stocks, and its true. Thats why a lot of strategists are still hanging on to them for hike a barbell approach. But any volatility is really an opportunity to rebalance your portfolio for a postelection world. And that means adding to companies that could benefit from positive news that we might get in the next couple weeks on a vaccine, covid impaired stocks are natural beneficiaries. There were a lot of postponed family vacations, and news of a vaccine could change sentiment on those quickly. Theres pentup demand that could benefit a Marriott International or a wynn. Airlines could take a little bit longer to recover as companies have reassessed business travel, but we could see these your puck up as people take a road trip to vegas or a getaway to a city nearby. Jack ive got to hear what alexs tech stocks are because a lot of them are so expensive. What names do you like at these prices . I think tech stocks are very expensive, but we have to remember that tech has worked in a bull and bear market, as one strategist told me today and, you know, works in an election recount as well. So there are a few plays, tech is expensive, but compared to consumer staples, theres some names that still arent that expensive. One i would point to would be google parent alphabet. The stock trades about 29 times per earnings. Its cheap relative to the rest of tech. And so i think thats one way to play the tech sector, going forward. I think you could also look at microsoft. Its sort of under the radar in some ways, and its also more diversified than a lot of tech from the cloud to productivity software, to gaming. And then theres amazon, right . I still think investors havent fully grasped just how important a role and just how good the Holiday Shopping season is going to be for them. Jack so, ben, if people dont fully understand how great amazon and some of these other companies are, what looks to you like maybe Market Expectations are too high . I always get afraid when i see a sector move a lot just because of the election result. A good example is health care which jumped about 8 this week really on hopes that now medicare for all is off the table. But did anything really change to make cigna worth 20 more today than it was before the election . Or unitedhealth up 13 . The big thing is dont chase these guys. Usually when this kind of move happens, theres two months of going sideways to down. Get your chance if you still like em. Jack real quick, carlton, perennially unloved financial stocks, can you give us a couple you like. Yes. Tree that i like three that i like, Morgan Stanley is well positioned for the recovery thanks to recent acquisitions. Truant, thats a result of bb t and suntrust from last year. Its starting to see the benefits of the merger, it was recent aa barrons stock pick, and finally, its another regional bank, one thats poised to do well and is benefiting from some costcutting measures. Jack these financials have rate, rock solid balance sheets. Someday their earnings remember Nonvalvular Afib can mean a lifetime of blood thinners. And if youre troubled by falls and bleeds, worry follows you everywhere. Over 100,000 people have left blood thinners behind with watchman. Its a onetime, minimally invasive procedure that reduces stroke risk and bleeding worryfor life. Watchman. Its one time. For a lifetime. I am a 9yearold boy who hopes a friend invites me to a sleepover so i can have dinner. I am a 15yearold girl who goes for walks during lunch so my friends wont know i dont have anything to eat. I was created by Artificial Intelligence from faces of the 1 in 7 American Children who struggle with hunger. Feeding america 200 food banks strong. Jack one of my favorite barrons traditions is to get actionable ideas from anyone who ever comes on a panel. Weve already had quite a few in this show, but were going to get some more. Carlton, we talked about the low yields that bonds are getting right now, so youve got an alternative the for income. Yes, im looking at the vanguard dividend appreciation etfs, and i dont know if you noticed when wingstop announced its 5 special dividend, this is at a time when dividends are under pressure. A lot of companies suspended theirs. But what were seeing now is even with those moves that several Companies Made to suspend their dividends, payouts are expected to only be down 1 this year and another 23 drop that was anticipated. Several Company Including darden and estee lauder have already resumed, so its for incomehungry investors that are looking for companies that reliably increase their dividends. Jack you love your wingstop, carlton. Reshma, whats your idea . You are bull you should about the possibility of a vaccine or bullish about a vaccine or stimulus, ijr ticker, its a high quality small cap etf and a good recovery play. Jack and, ben, what do you have for us . Vulcan material. This stock dropped because it was thought to be a play on a blue wave and making an infrastructure plan. Without that, the stock dropped, but it could be a good buy here. Thanks. Interesting pick. Carlton, ben, reshma, good ideas. Thank you so much. To read more, check out this weeks edition at barrons. Com. Dont forget to follow us bare Louis Vuittons online. Barrons online. From the fox studios in new york city, this is maria bartiromos wall street. Maria happy weekend to all. Welcome to the program that analyzes the week that was and helps position you for the week ahead. Im maria bartiromo. What a week it was. Legal ballots over the election are heating up. Ill be speaking with a key player in the 2000 bush gore florida recount, former florida secretary of state Katherine Harris is coming up. But first, top newsmakers in this weeks edition of the week
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