Midterm Results Point to a New Divide in Politics: Education


Comments of the Day
14 November 2018

Video commentary for November 13th 2018

Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.

US Equity Strategy
Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section:
"The Rolling Bear Market took out the last holdouts - Tech, Discretionary, and Growth Stocks - in October. The Rolling Bear Market has morphed into a Chopping Bear Market and we think the rest of 2018 will be a bumpy ride.
We prefer Value over Growth; Value outperformed Growth in October’s sell off. We think that was the beginning of a longer lasting leadership change.
Third quarter earnings results have been strong; we think this quarter will likely represent a peak in year over year earnings growth. The fourth quarter will get much harder as we lap numbers that received a boost from hurricane and tax reform related spending."

Eoin Treacy's view
A link to the full report is posted in the Subsciiber's Area.

The rotation out of highly interest rate sensitive sectors and into dividend growth companies remains a significant factor in this market. The underperformance of the extended FANG sector is a significant issue because just about all of its constituents have lost uptrend consistency and, as a group, they represent significant weightings in the major stock market indices.

Midterm Results Point to a New Divide in Politics: Education
This article from the Wall Street Journal may be of interest to subscribers. Here is a section:
"When Bill Clinton entered the White House a quarter-century ago, the parties evenly divided the top 30 districts. Republicans since then have gained in working-class and rural areas, and among white voters without bachelor’s degrees.

The result is an America divided in a new way. “The new cultural divide is education,” says Bill McInturff, a Republican pollster.

Education helps explain some of Tuesday’s results that might seem like outliers in solid-Republican states.

In South Carolina, voters last sent a Democrat to Congress from the Charleston, S.C., area in 1979. In Georgia, a Democrat raised $30 million last year to compete in an Atlanta-area district—and lost. On Tuesday, the party carried both seats.

Both those districts—South Carolina’s 1st and Georgia’s 6th—are in the top half among all House districts for educational attainment. Both also have some of the largest shares of college-educated adults in their states."

Eoin Treacy's view
There is one view that people who have been to university have more experience of life and the world, so they are better placed to arbitrate between arguments and are therefore more rational than people with less formal education. That’s a very nice narrative which will lead a lot of people to think that if they vote a certain way then you must be smart. Continues in the Subscriber's Area.

Microsoft President Warns Of '1984' Facial Recognition Future
This article by Dan Robitzski for Futurism.com may be of interest to subscribers. Here is a section:
“For the first time, the world is on the threshold of technology that would give a government the ability to follow anyone anywhere, and everyone everywhere. It could know exactly where you are going, where you have been and where you were yesterday as well. And this has profound potential ramifications for even just the fundamental civil liberties on which democratic societies rely. Before we wake up and find that the year 2024 looks like the book ‘1984,’ let’s figure out what kind of world we want to create, and what are the safeguards and what are the limitations of both companies and governments for the use of this technology.

Eoin Treacy's view
It is already possible to track a person’s movements with their phone. Governments can track spending habits from credit card statements and companies already tailor marketing to the way in which we use the internet. In order to follow a person around a city with cameras, a lot more are going to need to be installed but one has to question whether that will even be necessary. Continues in the Subscriber's Area.

Long-term themes review October 29th 2018

Eoin Treacy's view
FullerTreacyMoney has a very varied group of people as subscribers. Some of you like to receive our views in written form, while others prefer the first-person experience of listening to the audio or watching daily videos.

The Big Picture Long-Term video, posted every Friday, is aimed squarely at anyone who does not have the time to read the daily commentary but wishes to gain some perspective on what we think the long-term outlook holds. However, I think it is also important to have a clear written record for where we lie in terms of the long-term themes we have identified, particularly as short-term market machinations influence perceptions.

Let me first set up the background; I believe we are in a secular bull market that will not peak for at least another decade and potentially twice that. However, it also worth considering that secular bull markets are occasionally punctuated by recessions and medium-term corrections which generally represent buying opportunities.

2018 has represented a loss of uptrend consistency for the S&P500 following a particularly impressive and persistent advance in 2016 and 2017. Many people are therefore asking whether this is a medium-term correction or a top. There is perhaps no more important question so let’s just focus on that for the moment. Continues in the Subscriber's Area.


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