E Market Briefing For Monday, Dec. 21

Remember, you can get shakeouts, or even a correction, but no catastrophe, of course barring an exogenous event; or so-called 'Black Swan', swooping-in to disrupt the dynamics. The grand-scale cyber-attack was a potential terribly disruptive event; but either 'they' have control of it, or are minimizing what has been shared with the public, because so far it's not really influencing markets.

As I noted yesterday, an excess liquidity case is an explanation for the driving of equities higher in the near-term; and that doesn't change just because lots of traders are alert for a decline, or even coveting the prospect of shorting.

In sum: the pattern is unchanged as we've noted. However the risk matrix is a bit varied; not just because of the Fed allowing bank buybacks; not just the cyber-attack 'divide' that really makes one ponder 'why' Trump & Pompeo do appear split on this; and now the concern of a wilder faster Covid spread that occurs concurrently with media saying the 'cavalry in on the way with the 2nd vaccine; but that's no signal of near-term relief; even though most people sure do understand that this horribly situation isn't really at a pivot-point yet.

Bottom-line: the dynamics of an economic re-acceleration matter; and it may be troubling as many investors won't grasp an environment where small-caps might be outperforming the 'super-caps' handsomely; with speculation strong at times next year, while the stocks that prospered this year, pullback.

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