If there was any doubt that the U.S. government is going to support the financial markets at almost any cost, this past week was a good case study. Investors sure seem bullish about where the narrative is heading and the markets largely reacted in the way you’d expect. With just six weeks remaining in 2020, I’m not sure I’m seeing a significant catalyst for a pullback before the end of the year.
This turned out to be a big week for economic recovery plays. While short-term market sentiment became quite bullish, the equity market gains weren’t broad. I’m relatively bullish on the cyclical, value and emerging markets trade here.
To say this past week was eventful would be an understatement. The one thing that this past week’s events underscored for me was the sturdy optimism from investors regardless of the potential for several negative outcomes. I’m continuing to watch Treasury yields here for broader sentiment signals.