About Last Night… Look this has been fun, but maybe it’s best if we end things? The market is taking it all relatively well (VIX still sitting below 30) considering the election night surprises and lingering uncertainty, and indices have extended gains post-EU close (but are off their highs). That comes as vote counts continue to trend well for Biden, who is now carrying narrow leads in both Wisconsin and Michigan, where he could be declared the unofficial victor as soon as this afternoon (going a long way to sealing the deal even without PA’s help). What is more concrete is that Democrats’ hoped for Blue Wave is not going to materialize, and whoever is President will be dealing with a split Congress. The promise of a Republican Senate has prompted a strong tide of rotation rewind as investors adjust expectations for a skinnier stimulus package (MTUM +5.0% vs VLUE +1.1%; QQQ +4.8% vs IWM +0.4%,) -- still stocks have gotten an extra bid over the last few hours as Senate Leader McConnell promised a stimulus deal would be “top priority” when the body reconvenes next week. Tech / Media / Semis are all outperforming amid the return to growth / winning trades; in addition, reduced concerns of reform / regulation are helping Big Tech as well as the Healthcare / Pharma names. Treasury yields remain under pressure as the political rollercoaster certainly hasn’t come to a full stop, but the 10-year yield is only back to the range it occupied last week. It may be days before all the votes are finally tallied (and then expect some recounts), but if they’re all days like this, the bulls are fine with that.
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