But this number will almost certainly change, and likely dramatically over the next four weeks. 

Remember, this is what the chart of stocks looked like on the night of the 2016 election.  

With the election looming large, we get town halls tonight from both Biden and Trump, head-to-head on different networks. 

Everyone knows how the polls lean.  Let's take a look at how things look, at this stage, compared to 2016. 

Here's a look at the evolution of the polls for both Trump/Clinton and Trump/Biden. 

Yesterday we talked about earnings from Citi and JPMorgan.

Both were positive surprises on earnings and revenues.

Remember, as we discussed going into last quarter's reports, the banks have been primed by Fed and government intervention, to be profit printing machines.

So, let's take a look at the other two, of the biggest four banks in the country—Wells Fargo and Bank of America.

The results reported today were pretty much in line with estimates. But like Citi and JPM, both look a lot better than the headlines suggest.

For Bank of America, deposits were up 23% yoy. Investment banking fees were up 15%. And wealth management client balances hit record levels. If you add back the $1.4 billion they added to their war chest of loan loss reserves, their EPS gets closer to 0.70 a share, which is in line with 2019 quarterly numbers.

Wells Fargo is the worst of the bunch, by far, and may be one of the most hated bank stocks—which makes it interesting.

It's an early turnaround story, still working off the wounds of an account churning scandal from many years ago. And for a CEO that's only a year on the job, he has been given the opportunity to take all the medicine—to pull forward all the losses. There is no better time than in a global crisis (especially when the Fed has your back) to put all the bad news you can muster on the table. And it looks like CEO Charlie Scharf is working on it.

Wells put up $2 billion in net income in the third quarter, after taking $2.4 billion in charges. That includes booking losses to the tune of $961 million for "customer remediation" (refunds to customers for overcharging accounts) and $718 million for "restructuring charges" (severance payments). And it realized $769 million for credit losses, against a war chest of more than $20 billion in loan loss reserves.

As we discussed yesterday, assuming a continued economic recovery, the banks will ultimately distribute a lot of their loan loss reserves to shareholders.  In the case of Wells Fargo, that's over $20 billion.

Two of the "big four" banks reported Q3 earnings this morning. 

Remember, as we discussed going into last quarter's reports, the banks have been primed by Fed and government intervention, to be profit printing machines. 

The Fed, Treasury and Congress pumped trillions of dollars into the economy to keep consumers and businesses solvent. That's a direct backstop (protection) against loan losses.  And the Fed created tremendous revenue opportunities for the banks. They eliminated the reserve requirement for banks — taking the ratio from 10% to zero.  The banks are incentivized to make an infinite amount of loans.  The Fed is also a buyer of corporate bonds, reducing risk in the credit markets, which has driven record volumes in new corporate debt issuance.  That drives investment banking business at the big banks. And the liquidity deluge from the Fed has created a broad stock market boom, which drives trading revenue. 

So, despite the fragile economy, the banks are probably as low risk as they've ever been, because they will continue to be defended (if need be) by the Fed.

Not surprisingly, both beat expectations on earnings and on revenues for Q3. 

JP Morgan, the biggest bank in the country, made $9.4 billion on the quarter.  That's $2.92 in EPS — a record!   

But that was only a record quarter because last quarter, Q2, they stripped out $8.9 billion and set it aside for "loan loss provisions."  If you add that back, in Q2 the worst quarter in U.S. economic history, JP Morgan really made a record $13.6 billion, on record revenue.

That's a tough pill to swallow (even moreso three months ago) for the tens of millions of Americans sitting at home wondering if they'll keep a job or return to their old job anytime soon.  With that, the bank (and its peers) managed down earnings last quarter, by carving a huge chunk out to for "reserves."

This quarter, with the economy roaring back, both Citi and JPM let most of the earnings flow to the bottom line (they dialed down the loan loss provisions dramatically … just $314 million for Citi on the quarter and $611 million for JPM). 

But here's where it gets very interesting.  Assuming the economic recovery continues, this war chest of loan loss reserves will ultimately become earnings for the big banks, to be realized at their discretion.  That's a lot of earnings to distribute to shareholders. 

Stocks open the week up big.  Last week, it was many of the relative underperformers of recent years, that were the winners on the week:  small caps, infrastructure stocks, utilities.

Today it was a return of the seemingly indiscriminate flood of money into big tech.  Google was up 3.6%.  Amazon was up 4.8%. Facebook, up over 4%. Apple was up 6%. Twitter was up 5%.      

Is it stimulus? 

Despite a lot of jawboning over the weekend, a deal on stimulus doesn't seem any more likely. 

Is it China? 

Maybe.  The Chinese central bank removed a reserve requirement for financial institutions on foreign currency liabilities over the weekend.  This tends to be a move to weaken the yuan.  And that tends to move money out of China.  Money from China used to flow into our Treasury market, now there seems to be very healthly flows into a new store of value: U.S. big tech monopolies.

Is it earnings? 

Probably.  Third quarter earnings kick into gear this week.  We'll hear from Citi and JP Morgan tomorrow. 

As we know, Wall Street and corporate America will always take the opportunity to dial down expectations when possible.  They've been given the mother of excuses through the first two quarters of the year.  And they have taken advantage, setting the bar very, very low (if they have even provided guidance).  In the earnings game, expectations are set to be beaten.  And with an economy that has bounced back on the order of 35% annualized growth for Q3, we may see some broad and big earnings beats in the coming weeks. 

As of Friday afternoon, twenty-two S&P 500 companies had already reported, and twenty have beaten estimates.  So 91% of the companies have beat on earnings thus far.  And the average earnings beat is 25% above estimates. 

So, with a market looking for a 17% year-over-year earnings decline for S&P 500 companies in the third quarter, it appears to be set up for some positive surprises.

Stocks seem to be anticipating this, as we are sniffing toward the record highs in the S&P 500 today.   

As we end the week, we continue to hear the talk of more stimulus.  And it continues to look like it won't happen.

Why?  Because there is little political gain for the democrats to accept a deal that doesn't advance/fund the agenda they look to pursue in a Biden presidency. 

Still, as we discussed yesterday, the economic rebound has been incredibly aggressive, on pace for 35% annualized growth for Q3.  The question is, will the bridge that has been created with the help of the PPP program and stimulus checks fall short?  If the economy doesn't fully open very soon OR if we don't get another relief package very soon, it's only a matter of time before the bridge runs out and the suffering is amplified.

My view:  If we get a democrat sweep, expect a massive package to come, to kickstart the Biden $2 trillion climate response plan.  If we get a republican sweep (much lower probability), expect a trillion dollar plus infrastructure package. 

A split Congress, in the case of either president, would mean no more money, unless we get an extended pandemic timeline.  In that case, history shows us that you get action from a split Congress only when they get scared.  

With the above said, the odds makers now have a "blue wave" priced at a better than 60% probability.  Given that it would clear a path for a big government spending package (even bigger deficit spending), the markets have started adjusting for that outcome.  For the week, that has resulted in higher stocks, higher interest rates, higher commodity prices, and a weaker dollar. 

Third quarter earnings kick off next week with the banks.

JP Morgan and Citi will report on Tuesday.  Bank of America and Wells Fargo will report on Wednesday. 

These earnings should be very good.  Remember, the Fed is absorbing all credit risk.  And the Fed, Treasury and Congress have flooded the country with money.  This all makes the banks, profit printing machines. 

With that, even in a 31% economic contraction (in the second quarter), the banks put of big numbers (in some cases record numbers), while trying to manage those numbers down, by setting aside huge "provisions for loan losses."    

As we discussed after the Q2 reports, in this crisis environment, if a worst-case scenario were to unfold, even the war chest of capital these big banks have set aside wouldn't come close to absorbing the losses.  That's why the Fed, Treasury and Congress had to, and did, go all-in — and did so quickly — to neutralize the economic apocalypse scenario.  And there is no pulling back.  So, if they need to do more, they will.

What does that mean?  It means the tens of billions of dollars that each of the big banks have earmarked as loan loss provisions, will ultimately be used at the discretion of the banks to juice earnings in the future, where they see fit.

So, with that in mind, they have operated through the third quarter with a glide path to profits, and won't have the excuse to build bigger loss reserves in this coming report.   And they were operating in an economy that has done this over the third quarter … 

Stocks took a hit yesterday afternoon after Trump instructed his team to walk from negotiations on a big stimulus package.

Today, the losses in markets were fully recovered on this …