This has been an ugly week for the stock market with the Standard and Poor’s 500 index declining 5.6% and all sectors deeply in the red. And also of note, the VIX spike above 40 for the first time in months this Wednesday. Nevertheless, I think risk/reward remains attractive and the odds heavily favor a post-election rally. More on this below.

On the COVID-19 front, in a nutshell, it is spreading and much worse in Europe but mortality is falling. The skeptics would say mortality is low because the virus is making its way to the vulnerable cohorts (lag). Others would point to the "deadwood" issue and many of the vulnerable have already been killed. Therapeutics are far better. And mitigation is better. But the key issue is avoiding the level of policymaker panic that would lead to broad economic shutdowns.

The video in this report is only accessible to members
The takeaway is to that wave 3 is really a wildfire through areas of the US that were largely untouched. In fact, if we look at some of the cities at the heart of Wave 1 and Wave 2, we can see that there is hardly a new wave of cases burning across these cities. Daily cases in Florida have hardly increased from their low and remain way off their peaks. And New York City has barely seen a perceptible rise in cases since October 1. And interestingly, this is very diff...

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 :)