Week 21 Analysis: Slight Bullishness and Cannabis Legalization Discussion
This week’s bullish sentiment slightly beat out bearish in the form of “Higher” answers to this week’s main question:
Would you guess that the S&P 500 index will move higher or lower next week? (from Monday’s open to Friday’s close; February 17-21)
This is a relatively small difference compared to previous weeks.
The confident levels were also relatively close this week.
Avg Confidence: 63.7%
Confidence Higher: 65.7%
Confidence Lower: 61.5%
The standard first open-ended question was:
What economic, political, or other news and events are you expecting to happen next week (February 17-21) that might have a positive or negative effect on the markets?
This generated a variety of different responses including the possibility of terrorist attacks in Russia, the Affordable Care Act, economic numbers, and the cold weather. Also there were several specific predictions about the market’s activities including…
“The indices especially the S&P, NDX and DJIA will continue it’s up and down cycle through out the year and will end up down for the year.”
“I’m changing it up this time and thinking we are in a range for a change, slightly higher to slightly lower. This market has to digest and consolidate from the last two weeks moves.”
“I don’t know of any event that would move the market next week. I believe the market will trend up with the lack of market moving news. Also Jan – March tends to be up with the new year investments which leaves the the rest of the year to develop and grow or make adjustments.”
This week’s unique open-ended topic was on the issue of cannabis legalization and generated quite a mixed reaction to the question:
Recreational cannabis sales have been legal in Colorado for about six weeks now. This instantly created a massive new market for small businesses and job creation. Other states have passed, or will likely soon follow, with similar alcohol/tobacco-style tax and regulate plans. What is your opinion on this trend and what do you think its impact on the country and economy will be 5-10 years from now?
About 60% of respondents provided a positive reaction to this question. This is just slightly above the most recent national polling data that shows about 55% of Americans support legalization.
The people who responded positively to the question generally mentioned the economic benefits, both for private businesses and for tax revenues. Here are a couple of the positive comments…
“If they allow it and tax it like they do everything else I think it will help bail out this country from the mess we are currently in with the govt spending like there is no tomorrow.”
“I think this would be a great source of tax revenue for the states legalizing the sale. As with liquor and cigarettes there will need to be regulation. I think all the states should legalize it.”
The negative responses were strikingly full of comments that are simply inaccurate. Several people stated concerns about more children using it if legalized, however currently it is actually easier for children to acquire marijuana than alcohol or cigarettes precisely because cannabis is illegal and unregulated (drug dealers don’t card, stores do). Also, there were several statements about an increase in addictions and the danger of cannabis use as related to alcohol, but the truth is that marijuana is actually not any where near as addictive as any other major class of drug and as far as danger goes, cannabis is much less dangerous then alcohol, or cigarettes, or many prescription drugs.
But for the purpose of this site, we’re more interested in the effect on the economy, and others simply stated that they did not believe legalization and taxation would provide any long-term benefits.
Here are a couple of the negative responses…
“Well I think we are gonna have a bunch of mindless people walking around just another way for government to control people so they can do what they want after all everyone’s gonna be mindless”
“I think that is very negative for the United States and don’t believe that the gains in taxes will offset the cost drugs on the American society. I don’t believe that it will have difference on the crime rate..Just a lot less people being arrested for selling drugs. I believe that there still be bootleggers selling Pot…Also a lot of illegal activity associated with drugs.”
So what do you think about the market for this week? Why are so many people still repeating disproven information about cannabis and is the War on Drugs hurting the economy? Please continue the discussion in the comments section below.