Has all the optimism for the year been priced in already?
As the market gets over election week in the US and the Pfizer vaccine news expediting the rush away from the sidelines on Monday, the market is now having to contemplate what all of this means as we head towards the final few weeks of the year.
The vaccine news gave the clearest indication yet of light at the end of the pandemic tunnel but as the euphoria settled, investors are realising that such a reality may not even come any time before 1H 2021 and perhaps at the earliest Q3 2021 instead.
There is a grueling wait in between now and then with the virus situation worsening in the US and still looking rather bad across Europe as fresh restrictions were imposed in recent weeks - with that possibly going to stay for a long period of time.
Adding to that is the White House having taking a step back from stimulus negotiations yesterday and leaving Congress to its own devices in figuring that out.
From a technical perspective, US stocks also look frothy as the manic moves on Monday lifted the S&P 500 to fresh all-time highs, albeit only for a brief moment.
Put all of that together and the key focus now is how much appetite, or greed if you want to call it that way, does investors have in wanting to look beyond all the pessimistic developments as of late? Can easy money carry the market as it has been doing since April?
Or are we going to see a deeper correction with further profit-taking activity on the cards as we start to approach the year-end? The battle continues...
