October 9, 2020, 11:36 am EDT
Optimistic Expectation for Stimulus
Stock markets keep its straight up rally in anticipation of another 2.2 trillion stimulus money. Mega money printing strategy worked very well for the stock market during the pandemic which began early 2020. However, it is important to know that the US presidential election is only a few weeks away. It could be the end of the strong rally. However, there are still area of growth:
- Material: commodity in basic material could rise up because oversupply paper money
- Infrastructure: heavy equipment, machinery and projects are likely to grow after the election because of infrastructure development from the US government
- Defense: US-China relationship is getting tougher so air jets, radars, weapons, could become essential.
- Semiconductor: 5G and all communication devices, cell phone, display, censors, need semiconductor chips to empower.
- Biotech & pharmaceutical: COVID-19 is here to stay for years or decades to come. So, vaccines, treatments, and drugs are needed.
Thus, the longer term picture is still rosy in these areas for the post-election era but careful sections are necessary for the portfolio setting.