COVID-19 UPDATE: USA COVID-19 cases exceed 100,000. 10 US counties super-parabolic. El Paso 33% of TX cases, but 2% of TX population.

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STRATEGY: The new President of the United States is still...undecidedToday (Wednesday) is D+1 after the 2020 election day, and the outcome of the Presidential election is still undecided, with the key states still counting votes and even potential recounts in several states.  An "undecided" and even "contested" outcome was widely anticipated, and many of our clients were positioned with this as the central case.  In fact, this positioning also contributed to the fact that stocks did not panic on this outcome and the VIX actually collapsed.  The S&P 500 managed to post a strong rally, up 2.25% (gave up a much stronger rally).  Was this rally justified, even with a contested election?  In our view, if one believes more than one of the factors below, then the answer is yes:- stocks fell 10% in the past month, discounting a contested election- investors were cautiously positioned into election day (cash >$4.5T)- tech rallied due to Republicans holding Senate (tax cuts off table)- mutual-fund/ October YE tax loss selling over coupled with seasonal weakness ending- Santa Claus rally still in play- Republicans holding Senate make fiscal stimulus prior to YE more likely (vs lame...

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