Financial Analysis – Week 45, 2020

Nov 10, 2020

Market Overview




Last week was marked by the presidential elections in the USA, which ended in a big scandal. Namely, it is not yet known who the president of the USA is, because there were big irregularities at the polling stations.

The media declared that the winner was Joe Biden who gained 80 million votes, but the legal team of the current president Donald Trump filed lawsuits for the irregular model of counting votes in several countries, in which Trump led convincingly, and suddenly, shortly after in-mail ballots arrived, there was a big turnaround.


Who is the president of the United States then?

According to the American constitution, all legal issues must be resolved by December 8, 2020, and until December 14, the State Election Commission must announce the name of the new president.

All options remain open in the presidential race.


How did the markets react:


Stock indexes

My assumptions are that Wall Street bet on Biden and the Democrats to win. This is best illustrated by today’s Dow Jones index that achieved its all-time record and reached – 29,415 or growth in one day of +3.86%.

S&P 500 rose to – 3,608 or 1-day growth of +2.83%.

What caused this growth.

From my perspective, there are two important reasons:

1.  The belief of the brokers on Wall Street that Biden’s victory will lead the Federal Reserve to prepare new large packages of financial injection to the troubled American economy, where they see the possibility of their huge earnings, and

2.  Report of Pfizer Inc. and German partner BioNTech that their vaccine against COVID-19 has shown efficacy in 90% of cases in preventing infection, based on large clinical trials. The news resonated today as a bomb in the markets and there was an immense growth of the indexes, because investors are eager for good news about the end of the pandemic and the beginning of a great recovery.

I am sincerely glad that the vaccine against COVID has been found, but I have to express my great doubt about the speed of its application and the speed of its healing effect for the bad economy. To ne honest, this news seems like a well packaged media spin to assure the victory of Biden, who said his first fight would be with a pandemic.

In any case, the brokers on Wall Street reacted with lightning speed and inflated the bubble of shares upwards, attracting risky capitals, who believed that a sure economic recovery was coming.

According to one scenario, which seems quite acceptable to me, Biden’s victory will lead to a huge injection of fake dollars in the stock market, brokers will significantly raise the amounts of shares in the next 12 to 18 months. Some analysts say that the value of shares will double, followed by a financial meltdown and the burst of a large bubble.

Perhaps here we can look for an answer to the question of how long the sick and incompetent Biden will rule and who will replace him. Currently, three groups of Democrats are fighting to replace Biden, who will have to hand over power to younger and more powerful individuals.



Gold fell by $ 100 or 4.5% today to $ 1,866 as brokers shifted investment to stock index growth, expecting big profits.

The price of gold will have large daily oscillations in the next month, because the uncertainty from politics, regarding the election of the president, will be transferred to gold.

I repeat that gold will have an upward trajectory in the coming years, and that my advice to buy investment gold refers to the protection of savings and capital, with earnings that will follow in a period of 5 years.

This is very important to understand, because there are unjustified cowards, who get scared at every turbulent fall of gold and want to eat their selves alive, not realizing that turbulence on gold is part of current speculation, which doesn’t have long-term effects.

Let’s see how the price of gold has moved in the last year.

The price of gold on November 6, 2019 was $ 1,463, while the year later on November 6, 2020 it was – $ 1,965 or an increase of +34.31%.

Wasn’t this annual increase in the price of gold good for investors?



Oil prices jumped by 9.64% in one day, because news about vaccines and Biden’s intentions to reach an agreement with Iran, start economic growth and employ the people, brought optimism to the oil market, so American crude oil rose to $ 40.72, and Brent at $ 42.79.


US dollar

The dollar continued to fall this week to 1.1820 and followed the fall of gold and the fall of silver, which is the best proof that this is a daily speculation of brokers.



Bitcoin continued to grow this week at $ 13,008, while on the stock exchange in Moscow it reached – $ 15,355.


Russian ruble

After falling last month, it remained at 90.2041 for the euro and 76.2922 for the dollar.



The price of copper continued to grow and today the contracts were closed at $ 6,948.


Corporate news

At the end of October, the American Ministry of Justice initiated a procedure against Google due to monopolistic behavior, the company has already received a lawsuit from the European Commission for the fight against monopolies for 8.25 billion euros. In the third quarter of 2020, Google generated revenue of $ 37.1 billion.

The American electric car company Tesla is stalled over the construction of the first electric car factory in Europe, near Berlin, due to the lack of a permit from the state environmental agency.



Branko Dragaš

Investment banker


Market Overview