COVID-19 UPDATE: Post-Georgia run-off, VIX should fall = risk-on. UK variant seems to be more contagious for 20-year olds

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STRATEGY: Post-Georgia Senate run-off, VIX should fall = risk-on stocks
Equities staged a decent bounce Tuesday, even as the Georgia Senate run-off elections were not yet decided.  The consensus seems to believe that if Dems win both seats, this is negative for stocks because of the risk of higher taxes.  But market expectations about election outcome are not really reliable.  I don't know the future, but to me, the "uncertainty" of the election is arguably a bigger overhang than the actual outcome.  Moreover, check out the comments from Tom Block, Fundstrat's Head of Policy Strategy below regarding the impact of a Dem sweep in Georgia:

- he doubts Congress pass higher capital gains taxes (perhaps corporate) and a heavy conservative bent remains in the Senate

The video in this report is only accessible to members
Source: CNBC and FundstratBut we think the bigger implication is that this "uncertainty" is lifted from markets. Take a look at the VIX below and you can see we have seen a 30 level on Monday and a 33 the week prior.  These are extremely elevated levels.  And the question we should ask is whether the VIX will remain elevated post-Senate outcome.- I think the VIX is likely to resume its downward trend, and potentially f...

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