Zoom, Doom & Gloom…Risk-off has been heard throughout the land as the violent combo of a stim stalemate, panicky responses to a renewed COVID case wave (note the death rate remains flat) and fading hopes of a blue wave (polls suggest Senate races are tightening), have triply hit market optimism today. Corona has dominated the headlines to start the week as the US saw its 7-day average for cases hit a new record. WHO Chief Tedros called for “sacrifice” to meet resurging cases and the Surgeon General issued a Thanksgiving warning that said as many as 12 states may need to cancel their holiday plans if cases don’t subside. The corona quick re-escalation impact has been dramatic -- US equity markets accelerated lower as the morning wore on. The Vix went above 30 and the Dow, Nasdaq (see chart below) and S&P all broke below their 50dma. The Travel&Leisure sector, COVID’s whipping boy, has also been hardest hit today, led lower by Royal Caribbean (-11.6%), Marriott (-6.2%) and United Airlines (-7.4%). With a big week ahead, including everything from macro data to blue chip earnings to a pending ELECTION, the risks to investors are not small. There was optimism in the air last week in the form of PMIs and possible stim, but the SAP (-22%) meltdown in Germany this morning was a stark reminder of what can happen when expectations aren't matched. SEE: Alphabet, Amazon, Apple and Facebook on Thursday.
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