First Word

COVID-19 UPDATE: Wall of worry is growing given Europe case surge. Supreme Court Justice battle. US cases organically easing. VIX falling similar to June correction.

Click HERE to access the FSInsight COVID-19 Daily Chartbook.

STRATEGY: VIX falling, looking more like June sell-off.  Low prior to election day...For the past 3 weeks, stocks have been correcting and in the past few days, this sell-off has become very steep on the downside.  Yesterday's 3% intraday selloff also pushed the S&P 500 to >10% off its recent high, making it the steepest selloff since the June 8% correction.The wall of concerns has been mounting in recent weeks and over the weekend:- Supreme Court Justice death of RBG brings dysfunction of Washington front and center- 2020 election likely to be contested and potentially undecided- Europe is seeing a resurgence of cases- Many healthcare experts see a COVID-19 second wave beginning this Winter- China/US geopolitical tensions (TikTok)The list can go on and on, but you get the picture.  Investors can cite a mounting list of concerns.  But here are some things to keep in mind.Uncertainty risen and markets prefer visibility --> election day will mark a turning point for visibility...The list above is adding to uncertainty and hurting market visibility.  And we all know that as visibility contracts, equity risk premia rises.  Hence, stocks fall.  November 3, 2020 is a key turnin...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

More from the author

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Want to receive Regular Market Updates to your Inbox?

I am your default error :)