Euphoria dominated the early going, tempering a good bit later in the day, nevertheless an impressive showing and vindicated my 'not shorting' the S&P during this entire phase of action. Nasdaq was a blow-off and reversal. By the time it was over it was a 'recovery play' rally, not an overall advance and for sure not featuring those super-cap leaders that were increasingly pricey.

So now we face the 2021 transition year for vaccine distribution, require what is simply called a 'stimulus bill', and we need to see the Fed stay as they are, at least for now. Banks and Oils did a lot better today as they reflect what I've been talking about, the new year for recovery and even better global spirit.

Plus before vaccines become available, we'll at least get Lilly's (LLY) MAB drug, at the same time Sorrento's (SRNE) initial one is mysteriously in some state of Phase 1 testing at Temple Univ. and in Brazil (and today filed for a stronger version). It is important (room for many) that Lilly got an EUA for theirs late today.

So much to review, probably most important is the exponential rise of COVID, as it is morphing way beyond any sort of sequential increase. That's alarming and it's all going to strike during President Trump's continuing Presidency, so it might be urgent to shift the focus from politics, although it's too late to avoid what's coming 'before' vaccine or treatments distribute, though individually we can look out for ourselves and have some logical situational awareness as we are out-and-about. If COVID cases double in the next two weeks, well, that's an economic suppressant regardless of how things may improve later next year.

Technology stocks (or online companies) were relatively mixed, though many were down and more may be tomorrow. Shifting sectors for sure makes sense when you envision people getting-out finally and mingling, shopping, dining, traveling, and just living like they want to. While aspects of a tragic pandemic will linger, it will be recovery not debacle that prevails in investors minds, and at least political and financial leaders (both parties and the Fed) understand the lessons from history. That's why they allowed history's highest deficits.

It's also why I correlated this pandemic and aftermath more with the 1917-'18 'Spanish Flu' (followed by recession and thriving prosperity), rather than what so many bears must surrender thinking about, another Great Depression. We had that (still do) in some economic areas, but Government responded much better early enough, before political wrangling messed things up recently. As it evolves from acute to chronic issues for Americans, I see the 'Roaring 20's' not the 1930's, although it will be choppy in the near-term. The vaccine report today provides a floor, so while we transition, it's a changed backdrop.

It's not a targeted-tax-hike issue now, because you will likely have gridlock in Congress (and Biden needs that to repel leftist pressures), but it's the need to recover from an economy behind held hostage for so many months (to some extent more so because of politicizing social guidelines), and realizing that we are not going to transition to a 'digital economy', because we're there now. An error however is to presume a lot of people won't relish the chance to return a bit to normal commerce and travel, not doing everything 'solely' online.

This is exactly why some poster-children of the pandemic got hit today.

The Fed today mentioned 'climate change' for the first time in it's financial stability report. And talked of rising household debt and insurance risks. I'm in a so what mode about that, as I think that report shows the need for continued relief and stimulus, but we already know this. And of course they didn't factor, nor postulate, the impact of a successful vaccine on their estimates.

But yes, people are going to help kick-start so many sectors, and although the graph of new COVID cases continues to go parabolic (positivity rates too in so many states, which is why you see surprising states like Nebraska and Utah suddenly imposing mask mandates), it will reverse dramatically next year as I have suggested before, and today's vaccine new amplifies.

So, an epic 'Value over Growth or Momentum' trade of outlier proportions, will sting multi-year consensus about duration's, about secular-over-cyclical size positioning (small cap vs large), volatility, leveraged Balance Sheets, Yield Sensitives etc. Volatility paired-back after the election outcomes, but may shift again.Translation: a paradox within today's explosion across markets is that it may result in one or more quant funds capitulating and liquidating. So this can introduce a different dynamic unrelated directly to politics, just the extremes.

At the same time there's the Georgia runoff (matters to market), and there's a slight (albeit unlikely) legal challenge avenue the President is pursuing at the same time he's on a 'firing' spree. Yogi says: 'it ain't over until it's over', but the 'establishment' says it is. On Sunday I prepared random ruminations that's related to this, which I'd not have included if not already written (as this was a complicated day). However they are included if you wish to take a gander.

Oh.... today... Fox News anchor Neil Cavuto abruptly cut away from a Trump campaign press conference led by Kayleigh McEnany Monday afternoon due to her allegations of election fraud without evidence. I know some say there's some, but 'scale' matters. FOX would not carry it in good conscience, and that is part of the dispute within the Murdoch family as Rupert is fuming over this. I can tell you what that matters: cable news gets paid so many cents per viewer from cable systems (and streaming services). That's where the money is for them not advertising. At the moment Fox is 'trumping' CNN. If that shifts so do the fortunes (actually towards AT&T (T) who owns CNN, and away from Fox).

Oh.. later this week a Tropical Storm going into the Gulf is returning to Florida and this time 'maybe' my direction. In-event of a power outage I'll do the best I can, no reason to email should that happen. For this service to work I need the vendors we use, but locally both power and my fiber internet service.

Executive Summary:

• The Democrats have won the Presidency, it invites a period of calm (so far), and it may stay tempered so long as they don't overplay their hand with regard to policy, and yes it is being challenged.

• The left-wing agenda (which Biden swore-off) can be stopped in its tracks, only if Democrats don't take control of the Senate, that matters keenly to the stock market, and that will be a special topic I'll explore below tonight.

• So you sort of took the 'tail-risk' out of the political situation last week, and now there is a 'tapered-tail' risk with regard to the perceived COVID scene.

• Market response to the Pfizer (PFE) vaccine does raise the bar for alternative vaccine makers, who must make sure to have seriously viable vaccines.

• But more important it's not happening as quick as some think, and there are lots of doctors and officials at-pains to warn how COVID goes on into the Winter, and that the worst might actually be ahead (short-term).

• This is a wild rush that validates my view of a synchronized recovery even on a global scale as we get through this horror, but it's going to take time and the market gets immediately ahead of itself in that regard.

• So this was largely emotional, and not entirely science-based, since most of the other COVID-players were again the worst performing sectors.

• The market had assumed less successful vaccine efficacy rates, so that '90% claim' is what really got the attention today, it's validity is dubious in a sense, but we hope affirmed.

• Also there is nothing that mitigates need for antibody therapeutics in this news, although the thesis of the larger 'vaccine' companies over smaller works, but they should be differentiated from 'antibody / antiviral' stocks, which was certainly not the case today.

• Speaking of therapeutics it was today that Sorrento filed their 'Treatment IND' for the 2nd generation antibody trial (STI-2020), even though the first one (STI-1499) has no published results yet, nor do we know if they actively recruited and began testing (like I said, sketchy management as well as intriguing COVID portfolio mix).

• We genuinely hope they succeed, not so much for the speculative stock, but as such treatments are essential, especially now (similar to what the President got, but on a far lower dosage they claim with greater efficacy).

• Again the recovery theme requires not just vaccines, but antivirals, so in that perspective it is possible the antibody stocks that got slammed are in a lower-risk category as contrasted to vaccines, for which major pharmas have claimed there will not be big profit centers (ha: that's the 1st year).

• Yes I (perhaps like you) envision returning to cruising, traveling to tech or similar trade shows, and so on, but realistically that's more a story for the latter portions of 2021 and 2022.

• However where there's zero cancellation or change penalty at all, I might consider booking a flight or two well in-advance, one should be careful in travel arrangements, as for now airlines are more cooperative than hotels in-general, and I suspect it would be a couple years (if ever) that I'd again chance an AirBnB outing, and cruise-ships will be iffy for awhile yet.

• Markets were a bit of a scramble today, along with sector shifting, there is not an expectation of much more S&P upside either beyond this thrust, and in some cases (see main video) we had key reversals on Monday.

• Regardless, we continue envisioning meandering through this over time, and I hope we've helped by pointing-out the risks of shorting this market as well as repeatedly nothing Bears were truly 'fighting the Fed' all along.