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Daily Archives: 9th November 2020

9th November 2020

🎉 A Vaccine in Sight = Market Euphoria

iTraxx Main

50.3bp, -2.2bp

iTraxx X-Over

293.2bp, -20.3bp

🇩🇪 10 Yr Bund

-0.54%, +8bp

iBoxx Corp IG

B+111bp, -8bp

iBoxx Corp HY

B+415bp, -30bp

🇺🇸 10 Yr US T-Bond

0.96%, +14bp

🇬🇧 FTSE 100

6,185, +275

🇩🇪 DAX

13,101, +621

🇺🇸 S&P 500

3,601, +93

All falling into place for Biden…

Now that’s what we call a rally! Already riding high on the back of the Biden election win at the open, the news later that the Pfizer/BioNTech vaccine was found to be 90% effective saw markets in euphoric form.

The S&P hit a new record high and our 3,700 target at year-end now looks an ultra-conservative one! Rates markets alone were in reverse as credit spreads saw an almighty squeeze. None of that was quite in the script. Still, it’s relief all round. An early present for Biden. Happy Thanksgiving and Merry Christmas and all that.

The dynamics will have altered in the near term as investors get excited about the potential for higher growth, activity and the reflation trade. Specifically, a return to some kind of normality means markets are ending the year on the front foot everywhere and a broad macro recovery means that the widget makers will possibly roar ahead and outperform. Big tech and healthcare are likely going to take a bit of a back seat.

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