After big gains for risky assets following the US election result, the announcement of a potentially successful COVID-19 vaccine provided a second catalyst to spur markets higher. Not that everything rose: it was much more about rotation into the YTD laggards and cyclical and 'reopening' sectors.
Still, the vaccine news has understandably led to more positive sentiment. And seen from a "down the road" perspective, it's hard to argue that we will not be in store for a positive economic reassessment and improved macro environment, which will prove risk positive and provide a favorable backdrop for risk assets.
After all, the Fed made it clear once again that there'll be more rather than less stimulus in the coming months. Nevertheless, in the next few weeks, we might get a few bumps along the road. After all, quite a few positive catalysts have now materialized and as we have seen so often in this roller coaster ride, what goes up ultimately comes down
Essentially we have an incredibly nice narrative set against a horrible current sentiment backdrop, So it kind of depends on your time horizon. If your time horizon is more than 1-month, it's an incredibly bullish story, but if you are short-term like most Interbank Traders, it's hard to be bullish with the COVID cloud storms lingering overhead. It's a horrible place to be sitting aggressively neutral for now, while the market is mega bullish on every time horizon beyond a few days as the roaring 2020's trade is coming soon.
Oil continues to hold station on a positive JMMC vibe.
Oil continues to hold up as there is a strong vibe in the market that the JMMC will signal that OPEC + willingness to do what it takes to support oil prices while maintaining a unified front and will be perceived positive for the oil market.
One can only wonder where we would be without the OPEC backstop, guesses range from $15-25 per barrel but the truth likely lies somewhere in the middle. So this month OPEC + meeting is a huge deal for the oil market with Covid ravaging the US and EU economies