Stocks traipsed lower last week. Leaving no room for good news. Rather like watching the air drain from a large inflatable toy for five consecutive days.
Equities continue to bounce within an increasingly narrow trading pattern. With S&P 500 level 2125 serving as support, and 2155 as resistance. It is incumbent upon bulls to push stocks through the ceiling. Or markets will head south.
Investors can take solace in knowing that the four-quarter earnings recession appears over. However, the investor public remains disenchanted with equities. We suspect that has as much to do with the consternation over the two presidential candidates -- and the uncertainty that accompanies both -- as anything else.

Given the lack of clarity over next Tuesday's election, and the opacity concerning the nation's post-election governance, there's simply no enthusiasm for stocks. Which tend to be a litmus test of the electorate's view on the nation's near-term outlook. Voters are optimistic? They buy stocks, the market rises. Pessimistic? They sell. Sending stocks lower.
Though evidence of the post-election economic outlook exists.
The astute research analysts at TIS point to a chart of one-year Treasury yields which signals slightly higher GDP growth, rising inflation and the possibility of a dramatic increase in the fiscal deficit. Regardless of the election's victor.
Deficit increases? Ouch.
But increase they will. As recent revelations show that ObamaCare premiums will skyrocket in 2017. Across the nation. Premium increases range from high single digits to the highest ever seen at 115 percent. These increases represent pre-subsidy figures. Which account for the fiscal deficits.
Here's why.
The government is subsidizing part of the premium increases. Significantly so in some cases. The subsidies will be financed by selling debt. Meaning that, as interest rates rise, the budget deficit will rise. Assisted by the cost of this new entitlement being added to the current roster of entitlement programs. For which the sale of U.S. Treasuries appears set to enter an acceleration phase.
Suddenly the Affordable Care Act isn't acting so affordable.
Economically, Q3 GDP growth handily beat the meager expectations, hitting 2.9 percent -- the highest rate in two years. Besting the 2.5 percent anticipated target, as well as Q2's 1.4 percent. One blight, however, was the news that consumer spending was up only 2.1 percent versus the 4.3 percent Q2 gain and the 2.6 percent Q3 expectation. Consumers still can't catch a break.
And while a Fed rate hike remains highly anticipated for December 14, we doubt that this week's meeting will produce anything more than obtuse pronouncements and vague headlines.
The fly in the ointment? Last week's FBI decision to reopen its investigation into Hillary Clinton's email morass. After which the futures market lowered the probability of a December rate hike from 78 to 74 percent. Doesn't seem like much, but it provides insight into the gray areas linking politics and economics. And speaks volumes about the expectations for some volatility were the GOP candidate to pull off an upset. As most media outlets have essentially positioned the race as Hillary's to lose. And now she appears in jeopardy of doing just that.
In the energy patch, the weekend OPEC meeting was as disappointing as the Cubs' World Series home stand. As major producers failed to agree on oil production caps. Sending crude prices lower. Though the cartel maintains that the deal remains on course for a November 30 completion.
Stocks appear set to meander about within a stone's throw of the August high. Lacking a catalyst, this will remain the pattern through next week's election. Though some stocks, as a closer look at the Dow Jones Industrial Average (DJIA) reveals, have done better than others.
Year to date, the DJIA has climbed 4.1 percent, or 717 points. Surprisingly, five stocks have accounted for 87 percent of the DJIA's gain. Those being UnitedHealth. IBM. Caterpillar. 3M. And Chevron.
Despite the narrow list of stocks carrying the DJIA, the index has not seen any large losers this year either. Nike has been the worst performer. But thanks to its mathematically small stock price, it only hurts the index by 72 points.
Fact remains, the DJIA's 2016 trajectory has been remarkably narrow. With 17 percent of its companies accounting for 87 percent of its gains. Which means a year-end rally can only be catalyzed if the winners hold their gains, while the highly weighted laggards begin to rise appreciably.
Could election day - only a week away - be the catalyst for such a rise?
How about some worthwhile election trivia?
During the 1980 election, polls showed Carter leading Reagan by a 47 to 39 percent margin with two weeks remaining. Of course, Reagan won 489 electoral seats to Carter's 49. A landslide. And the opposite way to which the polls were pointing. How were the polls so wrong?
Spend some time reading some of the pieces on the internet about how oversampling has been adopted by some of the major polls. And one cannot help but wonder if this technique was not around as far back as 1980.
While we're talking election, here's a statistically improbable outcome that would really send the electorate into apoplexy.
Election predictions from the polls and betting houses have narrowed since Friday's FBI announcement. If they continue to do so, next Tuesday's outcome could be determined by the slimmest of margins. What if - as in the Florida "hanging-chad" debacle of 2000 - there was an electoral tie that required a ruling vote by the Supreme Court?
Back in 2000, Gore won the popular vote, but Bush won the electoral college. A decision that Gore pushed to the Supreme Court. Where it was settled by the Justices largely along party lines. Which brings us to this potential goat rodeo...
Following Justice Scalia's death, the court was left with eight justices. Four appointed by Republicans. Four appointed by Democrats. If Tuesday's election results fail to reach a clear-cut decision, how does a divided Supreme Court determine the ultimate outcome?
It's a scenario worth mentioning. One for which we'd think volatility would go through the roof. Let's hope it doesn't come down to that.
As of now, betting markets give the GOP candidate a 25 percent chance of winning. Not a great straight-up wager. But not impossible, either. Roughly the same odds as successfully calling a coin flip heads twice in a row. Or calling the suit of the card to be pulled from a deck prior to doing so.
Many of you have asked what party will be best for your investments.
Economically, either candidate will likely be viewed as more pro-growth than the current administration. From a party perspective, the best historical combination for stocks has been a Democratic president paired with a Republican Congress. Stay tuned...
Weekly Results
Major indexes finished mixed this week. DJIA gained 0.09%, S&P 500 fell 0.69%. The Nasdaq fell 0.1.28%. While small cap stocks lost 2.50%. 10-year Treasury bond yields climbed 11 basis points to 1.85%. Gold closed up $9.22 per ounce, or 0.73%.