Why We've Moved Higher

We've seen a pretty solid move in the major indices the past two weeks.  This flies in the face of a lot of economic data that seems to indicate at best the recovery may not be as strong as was recently thought.  Quickly what I think is happening is that the markets are pricing in not only a Biden win but the likelihood of the Democrats controlling the Presidency, House and Senate come next year.  To Wall Street that means there is increasingly a higher probability of much more fiscal stimulus in the new year.  Even if the President wins reelection I think the markets believe we'll see more stimulus in 2021 to try and get the economy back on track.

Add into that the likelihood of a vaccine and better therapeutics coming against Covid, as well as positive seasonal characteristics, and you have a higher probability of stocks advancing now through the end of the year.  There's trillions of dollars looking for an investment home and some of that money's probably coming into stocks in the next few months.

Of course I could be wrong, but at a minimum then I'd think stocks will just mark time.  You probably need a really bad piece of unexpected news to derail the positives right now.  

Stocks are a little overbought in the short term so we might see some backing and filling but in the voting machine that is the markets, it's increasingly looking like Mr. Biden is going to win.  

Of course we'll have to see and that's why they have elections.

Back sometime in the middle of next week.