Today's Selloff is NOT bad news for Harris

[Metaphorical]

I was thinking about the markets this morning, and a few key points occurred to me:

1. The tech sector is CLEARLY in a bubble that's finally popping. This is not news to anyone in that sector - the AI movement has been turning into the AI fiasco for months now, and outside of the tech giants, most companies are not doing very well. This isn't surprising - most of the investments in tech were in tulips (startups) that never had a chance in hell of breaking even, or went to propping up the cluster of five or six giants that have sunk billions into AI tech that will not turn a profit for decades, if ever.
2. Outside the tech sector, the economy is finally recovering from Covid and the rise in interest rates have mostly accomplished what they set out to do - slow the economy enough to press out the excess air in prices by deliberate inflation (greedflation) rather than due to supply chain issues. Powell hasn't lowered rates because there's still some price inflation, but the selloff may be just the excuse to do so.
3. A 1000 point drop today looks dramatic because it's a big round number (there's a lot of psychology there), but with DJIA at 40K, this is a 2.5% drop, really not much more than noise. (in comparison, when the market collapsed in 2007, you were looking at 5+% drops for that same range. When the market collapsed in 2020, the market lost nearly half of its value. I expect more volatility going into November (and yes, I'm nervous about 2025) but if the market is GOING to collapse, better to do it now. Also, mostly what I've head from people is "buying opportunity" - which to me is NOT a sign that the market is coming apart. It should recover by September.
4. We have an interesting opportunity, albeit at the expense of Biden. Right or wrong (mostly wrong), presidents are judged by how well the stock market does. For a sitting president, something like today can be fatal to re-election. However, Harris is not Biden (and is definitely not Trump). She's a blank slate. She may continue his economic policies (and probably should) but she may and probably will make modifications to those policies. The key here is that she doesn't really own the economy in the way that Biden is perceived to. That changes when she walks into the White House on January 20th, but for now, she's somewhat insulated.
5. Waiting on a VP choice is good (though I worry about not having a Number 2 in the wings until then, more from a security standpoint than anything). If she announces today with a selloff still in the news, the VP rollout gets perceived negatively. Waiting even a day means that she can retake the narrative, no matter how hard the MSM tries to push back.

[Walleye]

1. I'm sure she has a detailed plan, that would be so technical Trump would never understand

I really would like to see them debate this question without a cheering section

[Fiendish Thingy]

2. I'll take a 2.5% drop over double digit inflation every day of the week

And twice on Sundays.

This drop is nothing more than the economy wiping its brow after three+ years of red hot growth.

[SWBTATTReg]

3. Nice writeup. Thanks.

[SupportSanity]

4. Good perspective. And remember, the USA is not alone in this. London FTSE and Japan Nikkei experiencing the same

[Greg_In_SF]

5. I wouldn't be so sure

The last three times there has been a down market before an election, the incumbent party has lost. 40% of Americans don't own any investments. Of the 60% that do, few have a good understanding of the market. People just see red downward arrows on their TV screen.