January 17, 2021, 12:45 am EST
Biden, Politics, and Economy
01/20 is the inauguration day for the president of the United States. Biden is expected to become the president under tons of evidence of cheating and fraudulent cases through the voting machine, software, and processes. Uncertainty and confrontation in politics are expected to become sharper in 2021.
Biden proposed a 1.9 trillion stimulus plan that did not help stock markets. Instead, stock markets began to show weakness this week. His other proposal was to raise the federal minimum wage to $15 / hour. This action is going to hurt job markets and increases the risks of inflation.
US economy in terms of debt and the debt-to-GDP ratio does not look good at all:
- Federal Debt: Total Public Debt
- Federal Debt: Total Public Debt as Percent of Gross Domestic Product
In addition, a high valuation on stock markets (Shiller PE Ratio 34%) and extended rally (distance to its 200 day-moving-average) are at extremely high levels. Those are reminders of potential top-out.
In summary, it is time to be cautious about stock markets, although it is still at near record-high levels. Biden term, his politics, and economic conditions are getting into the danger zone. Investment strategy should prepare to shift more concertative.