Seeker Newsletter - Week of Sept 28th 2020

Good Morning,

I hope everyone had a great weekend and is ready for a BIG week. Investors will continue to keep a close eye on if selling pressures persist to close the third quarter or if we will finish the quarter on a strong note.

Let’s dive in and see what we can expect this week.

Stock Market Update

Believe it or not, we have less than 40 days until the November 3rd elections and less than 90 days until Christmas! Investors are trying to determine who will win not only the Presidential election, but the Congress elections as well, as it could alter things from an investing perspective.

Under a Biden Presidency, Corporate tax rates are expected to once again raise corporate taxes to 28%, from the current 21% rate. This would be a hit to the bottom line for business, so this is just one thing investors are juggling.

To add to that, we have the nomination of a new SCOTUS expected to begin hearings in the next few weeks.

In addition, something that is on the minds of many Americans is unemployment. Last week we saw another 870,000 initial jobless claims, an increase from the prior week. Congress has yet to be able to come to terms on a new round of stimulus for these unemployed workers. An agreement for additional aid could lead to a boost in the markets if that were to take place this week. Seems like the two sides are at least talking again, but this week could be a little early, but definitely something to keep an eye on.

On Friday this week we will get the September jobs report, which will be a big data point for investors. Unemployment is still expected to be north of 8%, around 8.2%. As the global pandemic continues to be an issue, many furloughed workers are now finding themselves permanently laid off.

Other economic data we will get this week will come on Wednesday when we get an update on Mortgage Applications and Pending Home Sales.

We are behind the hot IPO swoon we saw the past few weeks, so it will be interesting to see how many of those names perform.

Let’s take a look at how the major averages have performed year-to-date as well as the last week.

YTD/Previous Week:

Dow: -4.8% Dow: -1.7%

S&P 500: +2.1% S&P 500: -0.6%

Nasdaq: +21.6% Nasdaq: +1.1%

Last week we hit “correction” territory for the Nasdaq, but we were able to quickly regain and close the week on a high note. The S&P 500 is approaching “correction” territory, down nearly 9% since early September.

Listening to some analysts, and looking at the charts, it does not seem like $3,200 or $3,000 is out of the picture for the S&P 500. That would be the support levels we saw for the index back in June.

The 200 day MA is currently at $3,135, which is a level to keep a close eye on. If we drop that, then I think we absolutely test the June support levels.

In a time of uncertainty like this, I do not think it hurts to have a little cash on the sidelines. Plenty of uncertainty right now with the elections, COVID-19 cases, next round of stimulus, and the disconnect between Main Street and Wall Street.

The Nasdaq has certainly been under pressure of late, but is still outperforming the other two sectors by a WIDE margin. The S&P 500 is under threat of going red for the year soon. Right now the futures are pointing towards a green opening.

I will not be making any moves the first two days, as I will most likely wait or the market to react to the debate and see if any opportunities persist based on what one candidate said or didn’t say. You can often find overreactions by investors during events like these.

Seeker Portfolio

The Seeker Portfolio was started at the beginning of August and I have now funded $23K to this real-time portfolio. The idea of this portfolio is for subscribers to be able to follow along as I construct a new portfolio. This past week I made a few additions to the portfolio.

BUY 4 shares of Visa (V) at a cost basis of $199.25. This purchase adds $4.80 in annual dividend income.

BUY 3 shares of Vanguard Technology ETF (VGT) at a cost basis of $300. This purchase adds $8.49 in annual dividend income.

BUY 30 shares of Altria Group (MO) at a cost basis of $38.50. This purchase adds $103.20 in annual dividend income.

RECEIVED $16.22 in Dividend Income related to our holding of Vanguard High-Yield ETF (VYM).

Here is an updated look at the current portfolio:

Rough week for the portfolio as only 2 positions saw gains from last week, CRWD & TDOC. However, as I mentioned above, the S&P 500 is down roughly 9% for the month of September, but our portfolio is still up 6.3%.

We are now projected to receive $980 in Dividends, which is $20 short of my $1K goal, so we are well on our way. The current portfolio yield is 4.2%.

Stay tuned on Wednesday for my QUICK PICKS! Should be an interesting start to the week, so tread lightly.

As always, if you have any questions at all, please feel free to DM me on Twitter or simply email me at [email protected].

Have a great week!

Mark