Hello and happy Monday to everyone.

Is the election over? President Trump’s party says no, with multiple lawsuits coming out today on states he wants recounted. Unless there is evidence for his lawsuits, those should be over soon. Both presidential candidates had record turn out in votes. More votes this last week than any other time in history. To me, that’s exciting that America got out and did their civic duty.

One of my favorite things about Facebook is connecting with people you don’t talk to every day. Getting to see inside their life with what they share/post. Over the last couple of weeks, I have read many posts from clients that are strong Biden supporters and those that are strong Trump supporters. Why I like this, is because some are very passionate on the subject of politics and therefore that helps them drive their decisions, goals and feelings. I have known some clients for many years, and just now seeing this side of them. This helps me understand them more. I am not saying if I agree or disagree with their posts, but it does help me know them more so I can do a better job for them with our communication together.

What is the difference between the stock market and the US economy? At the most basic level, the economy is the production and consumption of goods and services. It encompasses all individuals, companies, and the government. The stock market however is the exchange where the buying and selling of shares in publically held companies takes place. I am bringing this up, as a reminder they are two different things. Yes, they affect each other. But they are separate. We can have times, where both are struggling, both are doing great, or one is struggling and one is doing great. With the government shutting the US down for covid-19 in early 2020, that turned the economy almost off very quickly. However, the economy will turn back on, it will just be very slow. The stock market is much faster moving up and down. The purpose for sharing this is to remind everyone, just because the stock market is doing good right now, does not mean the economy is doing good. We have yet to see the economic problems that economists tell us about weekly. These economic problems have literally been swept aside. Not fixed, just swept aside to be addressed over a longer period of time.

With President Elect Biden looking more and more likely to be our next President (assuming President Trump’s lawsuits end up not benefiting him getting re-elected), this brings change. The stock market typically doesn’t like change. Yet all last week the market was up with the anticipation of change. To remind everyone, President Elect Biden won the electoral votes easily. However the popular votes were much closer, saying Americans are very divided on this change. Analysts caution making any drastic changes in long term plans until more of these changes are known and therefore how they affect each of us.

In my office, I have amazing women that care deeply about me, our clients, each other, and Affinity Asset Management. Affinity would not be the great place we all come to work if it wasn’t for each of them. I also have an amazing entrepreneur and super creative wife of 26 years now. I wouldn’t be the man I am today, if not for her. And, I have 2 beautiful daughters, that I hope I am a good role model for. Whether you are a fan of Vice President Elect Harris or not, I am excited that we finally have a woman in this high office. Politics aside, we are one country regardless of sex, race or religion. It takes all of us. I am hopeful politics will become less and less in the news, and we can get this vaccine, get the stimulus, and move on economically to heal and grow again.

Lastly, we keep evaluating the market daily, and the investment committee meets weekly to discuss strategy. We still have some “things on our radar” ahead of us, meaning there are things coming up that haven’t happened yet. Some of these are good things and some are bad things. Our goal is to get everyone back into their normally diversified model of risk ASAP, but only when prudent. We still want to see some things work themselves out so we can see a direction, and to know some obstacles are behind us. As a reminder, if you are feeling excited about the election, the announcement from Pfizer today on the vaccine and want to get more back into the market, let us know. If you are unhappy about the election, and uneasy on where we are and the things ahead of us, and want to get out of the market, again, let us know. For those we don’t hear from, we will keep monitoring daily. We are 30% bought back into stocks at this time.


Performance DJIA:
Mon 11/2 +1.60%
Tues 11/3 +2.06%
Wed 11/4 +1.34%
Thurs 11/5 +1.95%
Fri 11/6 -0.24%

Last week +6.87%
Since 2/19 market high -3.49%

Tid Bits:

From Bloomberg

  • Pfizer’s Covid Vaccine Prevents 90% of Infections in Study
  • Preliminary results could pave way for vaccine by year-end
  • Pfizer, BioNTech expect to get two-month safety data next week
  • The Covid-19 vaccine being developed by Pfizer Inc. and BioNTech SE prevented more than 90% of infections in a study of tens of thousands of volunteers, the most encouraging scientific advance so far in the battle against the coronavirus.
  • Eight months into the worst pandemic in a century, the preliminary results pave the way for the companies to seek an emergency-use authorization from regulators if further research shows the shot is also safe.
  • The positive preliminary data mean the U.S. pharma giant and its German partner are on track to be first with a vaccine, after signing advance deals with governments worldwide for hundreds of thousands of doses. The companies have said they should be able to produce 1.3 billion doses — enough to vaccinate 650 million people — by the end of 2021. Only 50 million doses are expected to be available in 2020.
  • The findings are based on an interim analysis conducted after 94 participants, split between those who got a placebo and those who were vaccinated, contracted Covid-19. The trial will continue until 164 cases have occurred. If the data hold up and a key safety readout Pfizer expects in about a week also looks good, it could mean that the world has a vital new tool to control a pandemic that has killed more than 1.2 million people worldwide.
  • With effectiveness for the first vaccines previously expected to be in the range of 60% to 70%, “more than 90% is extraordinary,” BioNTech Chief Executive Officer Ugur Sahin said.
  • Moderna is considered the next closest vaccine frontrunner. It has said it could get safety and efficacy data from its late-stage trial this month. Johnson & Johnson, which has a one-shot vaccine using a different technology, could get efficacy data from a final stage trial by the end of this year. AstraZeneca Plc is also working on a vaccine using different technology, with results from studies in the U.K. and Brazil expected by year-end.

From American Century

U.S. Inflation Inches Higher
Although it remains weak, annual headline inflation is edging higher as the economy slowly recovers. Longer-term market-based inflation expectations are also rising but remain below historical averages. We believe these market indicators don’t accurately reflect the inflationary effects of soaring federal debt, a weaker U.S. dollar and onshoring trends among U.S. businesses. These factors should eventually drive inflation significantly higher.

Fed Sets New Inflation Guidelines
The Federal Reserve (Fed) unveiled a new monetary policy framework intended to better achieve price stability and full employment. The Fed replaced its 2% inflation target with a flexible approach aimed at achieving inflation that averages 2% over time. Accordingly, inflation may run above or below 2% to make up for past misses. In addition, the Fed will no longer preemptively raise rates based simply on unemployment falling below conventional estimates of inflationary employment pressures. This means the Fed could leave rates lower for a longer period, even if inflation rises and/or unemployment is very low. We still believe the Fed will do whatever it takes to support the economy through the pandemic.

Fed Favors Low Rates
We expect U.S. Treasury yields to remain in a low and fairly tight range. If economic data continue to improve, we expect the 10-year Treasury to trade in a range of approximately 0.65% to 0.85%. We don’t think the Fed will let rates climb much higher, mostly because low rates are keeping companies’ borrowing costs low, which in turn is helping markets. Furthermore, low rates are aiding the government’s deficit funding.

Gundlach: Markets Like Split Government, But Equities are “Really Overvalued” by Robert Huebscher, 11/5/20
Reflecting on the post-election landscape, Jeffrey Gundlach expects a split government to emerge, with a Biden presidency, Democratic House and Republican Senate. That outcome explains the gains in U.S. equities this week, but stocks are now “really overvalued.” He said he was surprised how deeply and evenly split the country is. He was not surprised by how wrong some of the polls were, citing one that predicted Biden by 17% in Wisconsin and national polls predicting Biden winning by up to 10% of the popular vote. The down-ballot losses incurred by the Democrats, such as the House seats they lost, were “predictable,” he said, as a result of the weakness of Kamala Harris. He called Harris “socialist-like,” and that led many to hedge their bets. Voters were worried that Biden may not make it four years, and don’t want a socialist agenda. We should not be surprised that markets like a split government, according to Gundlach, with the houses of Congress controlled by different parties.“The market views the election and split government as a positive,” he said. Bond yields fell logically because there will be less fiscal stimulus due to the split government, resulting in less of an inflation threat. “The Fed won’t see an inflation scare and it will be easier and more willing to do asset purchases,” he said. The U.S. market is “really overvalued,” he said. Mainstream economists are predicting U.S. real global growth will be 3.7% and the total world will grow at 5.2%. That says the U.S. is “way weaker” than the rest of the world, according to Gundlach. The U.S. stock market has also “wildly” outperformed the rest of the world for most of the last decade. He cited a number of metrics to support his view of U.S. equity overvaluation: market capitalization-to-GDP is the highest of all time; P/E ratios are higher than in 1930, before the Depression; and the Shiller CAPE ratio is near 30.


a) Global 50,871,423 cases 1,264,031 deaths
b) US 10,292,492 cases 243,771 deaths (+3.07%, +7270 increase from last week)
c) KS 99,291 cases 1,166 deaths
d) MO 218,257 cases 3,326 deaths


Highlights from analysts and economics

From BNY Mellon
Market Roundup
Global stocks declined for a second month in a row and fell -2.4% in October bringing the YTD loss to -0.7%. Uncertainty around the US election and path of the economic recovery in Europe and the US from a resurgence in Covid cases led to heightened volatility. Risk-off sentiment led to more than a 10% fall in oil and helped to drive the USD slightly higher by 0.2%. The global recovery remains uneven both across regions and sectors, and more fiscal stimulus will be needed to maintain continued progress. China’s lead grew further and has expanded to above its pre-Covid level. Europe faces mounting headwinds while in the US we are cautiously optimistic for continued growth.

2020 Election Update

i. Regardless of a favorable outcome for Biden’s team, the prospects of a Democratic-sponsored hike in corporate taxes, a focus on a ‘green’ agenda and the potential for increased cooperation in the international sphere could possibly face Republican opposition.

ii. Despite Biden’s win – and beyond party politics – Newton Investment Management global equity portfolio manager Paul Markham believes it could be a tough challenge for his party to satisfy its political base for new social policies, given the US’s poor governmental financial position – on account of its efforts to tackle the Covid-19 pandemic.

iii. “Higher taxation or further increases in government spending could cause headaches for the Democrats – the forthcoming four years will be very difficult– and what has been pledged by the party in terms of social and health care may prove hugely challenging to actually deliver. Democratic pledges on social and healthcare changes could be especially difficult to deliver, given the currently challenging government financial predicament,” he says.

iv. April LaRusse, Insight Investment’s head of investment specialists, believes key government policies are likely to remain unchanged under Biden, though she adds that the Presidential change and a wider mood shift could benefit risk markets. “In our view, if the Senate does remain in Republican control, this outcome could mean key policies like corporate taxes will be unchanged. That said, we would expect to see government bond yields move somewhat higher and risk assets rally, though not to the extent seen in 2016 given existing Fed policy. While an infrastructure deal might be less likely, so is further trade escalation, and so we may see trade exposed names benefit from that.”

v. In contrast, Alcentra co-chief investment officer Leland Hart is more concerned by the election outcome, in light of the potential market uncertainty it could generate. “We view the latest election outcome as a fairly negative result given the political uncertainty that may ensue. Ultimately, it means we could soon start to lose clarity on whether there will be decisive action by government and continued strong support for the economy,” he says. Hart says decisions on where and how support to sectors of the economy is delivered could become more complex and subject to political division between Republicans and Democrats. “In the recent past both sides have tended to politicize decision marking, often with a negative impact on markets, including private credit markets.”

vi. Newton Investment Management global strategist and member of the Real Return Team, Brendan Mulhern supports the view that potential bi-partisan conflict risks slowing economic progress and could dent market confidence. “The lack of action a split House and Senate might bring about has been on display this year with the Republicans and Democrats unable to agree on another fiscal package to support the economy. It’s difficult to say how much of this is down to the two parties playing politics ahead of the election but if the House and Senate is still split there may be concerns that policymakers in Washington will not be able to act decisively to counter the impact of the Covid-19 pandemic on the economy. This may come to weigh on market sentiment and expectations,” he says. John Bailer, lead portfolio manager of US dividend-oriented and large cap strategies at Mellon, also feels the Biden administration could adopt a moderate approach. On a more optimistic note he adds that, ahead of the election, the market was pricing in a Democratic sweep, so some sectors – such as financials, energy and defense which performed poorly before the election – might now rally. He adds: “Possibly the most meaningful change would happen with executive orders and appointees to Government agencies.” “I would expect more international cooperation, therefore helping companies hurt by the trade wars. Mergers & acquisitions could slow with a more consumer focused Department of Justice. Since 1933, a divided government with a Democratic President has led to 13.60% returns in the S&P 500,1 which has been better than average.” Newton head of fixed income Paul Brain is also optimistic government spending could continue to support the US economy and hopes international trade relations might also thaw under Biden. Separately, he also expects to see a rise in US Treasury yields following the latest election. “We would expect to see a new stimulus package put in place and global trade relationships improve a little, even if some US trade pressure remains on China. The US dollar could bounce back now that election uncertainty has been removed, but the trend is still likely to be lower against Asia in particular. “In bond markets, we would expect yields in the US Treasury market to rise faced with the prospect of more government spending, with the curve steepening. Investors in risk assets such as credit may be concerned about the potential for increased corporate taxes later, though initially, government spending plans look set to dominate and improve the outlook. We would expect the US dollar to weaken over time as domestic spending increases and takes in imports and emerging markets outperform.” For Jeff Burger, senior portfolio manager, Mellon, one asset class that may benefit is municipal bonds. “Under a Biden Presidency infrastructure spend may actually pick up – funded largely by the sale of municipal bonds. Here, we believe there could be an emphasis on ‘green’ and environmentally sensitive projects as a way of providing economic stimulus,” he says.

vii. Burger also raises the prospect of a push by Democrats to raise corporate taxes. If successful, this could also spark inflows into municipal bonds, given the tax exemptions they offer investors, he says. Meanwhile, Insight fixed income fund manager Gautam Khanna believes the Senate staying Republican under a Biden presidency means game-changing policies are less likely. In his view, markets will take comfort that further trade flare-ups are less likely (a positive for emerging markets and trade-exposed names), while possible Senate resistance to tax hikes will also be viewed positively. However, the Senate could also look to curtail Democrats’ fiscal spending ambitions, with pandemic relief packages and renewed infrastructure spend likely to face deadlock. The potential deregulation roll-back may also hurt sectors such as energy and autos, he adds. “If the pandemic continues to deteriorate and a narrow Republican Senate majority is a roadblock to a larger fiscal stimulus package, this ‘stimulus disappointment’ could cause increased volatility, offsetting the positive certainty on the tax front,” he says. “Nonetheless, markets are often comfortable with a lack of real policy change – so, for now, we see that result as positive for risk.”

viii. Global equities: The long-term view

  • For the Walter Scott investment team, the outcome could represent a change of direction in US policy with the prospect of higher taxation (albeit with more fiscal stimulus), wider health care benefits, a higher minimum wage and a re-engagement on climate changes issues. Even so, just how much of that agenda will actually be enacted depends on the extent to which a Republican Senate might counter some of these policies, aside from the question of government finances. They add: “Markets have increasingly anticipated policy shifts, but whatever the political landscape, we’re confident the US will remain a haven for enterprise and innovation. We’ve found that long-term growth patterns for businesses able to adapt and innovate are rarely significantly altered, whatever the political twists and turns.

From JP Morgan
Weekly Market Recap

Although the election captured the spotlight last week, we continued to receive economic data indicating the progress of the recovery. In October, total nonfarm payrolls increased by 638,000, reflecting private payroll growth of 906,000, partially offset by 268,000 fewer government jobs, of which 147,000 were temporary Census 2020 workers. The unemployment rate dropped to just 6.9%, with 11.1 million people unemployed. The labor force participation rate rose as 724,000 workers rejoined the labor force, possibly aided by the expiration of enhanced unemployment benefits. While this demonstrated solid progress, the pace of job gains has slowed. Of the 22 million jobs lost in the spring, cumulatively 54% have been regained, but that is a modest gain from 52% cumulatively last month and 48% the month before. There are still 5.2 million more people unemployed than before the pandemic, and the pace of gains is likely to slow further as the spread of the pandemic now exceeds 100,000 cases per day in the U.S. This could be a headwind in particular for service sectors, such as leisure and hospitality, retail, and professional and business services, which lost the most jobs early in the pandemic but have led payroll growth since then. With election uncertainty subsiding, investors should monitor the trajectory of the economic, labor market, and profit recoveries and maintain balance in portfolios as pandemic conditions worsen.



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Community Café is Wednesday, November 11 at 8:00am for 30 minutes. Topic will be on: “Charitable Giving – How to Build a Strong Family Legacy”

  • Will live stream on Facebook Live anyone who is friends with me on Facebook or Click Here to Follow The Community Café Facebook Page
  • Invitations will go out via email with a link to join on zoom.us, plus those who are friends with me on Facebook
  • Speaker this week, Glenn Stockton & Christian Toman
  • Invitations will go out via email with a link to join on zoom.us, plus those who are friends with me on Facebook

Estate Planning Webinar Tuesday November 10 at 6:00pm, Wednesday November 11 at 11:00am & Saturday November 14 at 10:00am

  • To Register for either date please email Stacy at [email protected]
  • Pros and cons of a Will based estate plan
  • Pros and cons of a Trust based estate plan
  • Co-hosted by Glenn Stockton with Stockton & Stern Law firm

Social Security and Tax Strategy Webinar on Tuesday November 17 at 6:00pm, Wednesday November 18 at 11:00am & Saturday November 21 at 10:00am
To Register for either date please email Stacy at [email protected]

If you would like a copy of my 30 minute recording of Community Café on the topic of “Tax saving Strategies”, please contact Stacy and we can email it to you. [email protected]
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Mark Roberts, President
Affinity Asset Management
13220 Metcalf Ave Suite 220
Overland Park, KS 66213
phone (913)381-4800
fax (913)381-4804






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phone (913)381-4800
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