Fears are lower and stocks are rising.
The balancing act of the past week is still at play. As we are informed of vaccines showing high efficacy rate, we are also informed of record-breaking Covid-19 infection numbers. As per Monday, the U.S. had a 13-day streak when it comes to daily infections. These counteracting forces are still dominating the market. Capital is still shifting back and forth from work from home and technology to cyclicals and value. The latter had the upper hand at the time of writing with value stocks, emerging markets, and small caps outperforming. Another positive news that contributed to this week’s rally was that President Donald Trump cleared way for President-elect Joe Biden to transition into the White House after more than 2 weeks of resistance. President Trump still believes the election was fraudulent and will continue his legal efforts to overturn the election result. All by all, things are looking good. November has been good to investors thus far with the Volatility Index (VIX), also known as the fear gauge, trending lower in the month. In other words, investors are becoming more optimistic about global economies and markets.