The View from 5th Avenue

The View at Two – 1 December 2020

Back to Business… Not much has changed but the calendar, but after an impatient rebalancing pause yesterday US stocks are back to doing what they did through most of November. The fresh highs are nothing new for the S&P and Nasdaq, but even usually stagnant Treasuries are getting in on the risk-on mood today, with yields moving higher on word a bipartisan group of senators is putting forth a $908bn proposal to Pelosi/Mnuchin (which the two are currently discussing on an ongoing call). Solid ISM data this morning pitched in as well. The dollar continues its slide today, getting an extra midday kick from the Euro and GBP gaining on headlines that Brexit trade deal negotiators have “entered the tunnel” (this really could be a day of loosening stalemates). It’s no doubt a Rotation-ary day (VLUE +1.5% vs MTUM +0.4%), but Tech/Media have overtaken Banks and Autos at the top of the sector table amid a busy conference schedule that includes AWS Reinvent (AMZN +2.2%). Fellow Value space Energy is well in the green but held back by crude’s preoccupation with OPEC+ talks. Defensives Telcos and Household Goods are lagging, along with Commercial Services space getting dragged lower by HIS Markit (-5.2%) giving back some of yesterday’s merger fueled gains. It’s a very cheery start to the holiday season, but with so much euphoria abound, what’s left for Santa to contribute?

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