Embracing Hope – After yesterday’s buying bonanza, markets were sure to about face and forge a sharp reversal today. However, the potential for a vaccine and Powell speaking to the use of any and all CB weaponry, has had lasting enough effects to keep the rally (for the S&P and Nasdaq) going. today The good news is value has started to outperform (though MSFT and Apple are doing a bulk of the work for everybody), and yesterday S&P equal weighted smalls also outperformed. Further, the positioning sentiment indicator is poised for recovery (see below). There are obviously a million notes of caution going into the end of 2020-- unemployment, the US presidential election and possibly tighter lending standards. No one can accurately predict the war between science/stimulus vs. nature/fear, but we do know volatility will be one winner.
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