Looking Back at the Markets in October and Ahead Through November 2020

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A lot has changed in the past week. I normally try and get this post up earlier in the month, but with everything that has happened—and which has demanded comment—this is the earliest I could fit it in. But that is a good thing, as the ”looking forward” piece is now going to be rather different than it would have been last week. So, let’s take a look back and then forward, and try and figure out where we are going in the next couple of weeks.

Looking Back

Economic news provides cushion. First, October. Markets were down pretty much across the board after a sell-off late in the month, on rising COVID case counts and widespread gloom and fears about the election. Despite the worries, the economy did relatively well. Hiring continued to chug along, layoffs were down, and consumer and business confidence held. A particular bright spot was—and is—the housing market, which continues to go from strength to strength. But the positive economic news could only cushion the market downturn, rather than prevent it.

Markets soar on vaccine news. What a difference a week makes. The election went smoothly, despite the fears, and was called without (so far) any significant turmoil. Then, with those fears settled, we got very good news in the form of the Pfizer vaccine for COVID, which was reported to be more effective than anyone had really thought possible. Even better than the news for Pfizer was what it implied—that other vaccine candidates, using the same technology, would very possibly be extremely effective as well. In a day, we went from no vaccine to possibly several, which took a big chunk of the pandemic worries out of the market. Markets soared on the substantial removal of two of the major concerns that held them back in October.

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