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COVID-19 UPDATE: For the past 4 days, 7D delta in daily cases negative, affirming Wave 3 rolling over, for now...We should not view 2020 pre-pandemic highs as the ceiling for Epicenter stocks.

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

STRATEGY: Strong year likely to see a strong finish...We are now in the final month of 2020 and the first 11 months are best characterized, in my view, as vastly outperforming expectations.  Despite a global pandemic and economic depression, equities have been surprisingly resilient.- We don't see how stocks suddenly weaken in this final month.- Granted, the risk is that this is a consensus view, but we are in a seasonally strong period for equities- Hence, we see the S&P 500 ending the year at 3,800, or roughly 4.5% upside from current levels.Don't view 2020 highs as the "absolute max" for Epicenter stocks, since their P/E can expand substantially...We think most investors are skeptical of the rally in Epicenter stocks.  In fact, we have noted many pointing to the fact that many of these are within 20% of the 2020 pre-COVID highs as a reason to avoid them.  But this exposes a flaw in the framework.  - Why should 2020 pre-COVID highs be the high for epicenter stocks?- Given the future operating leverage, their earnings power is substantially stronger- Equity risk premia should fall = higher P/E- Epicenter stocks have been underperforming and de-rating for 15 years, so why is 202...

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