The stock market rallied higher in the face of what many thought would be the worst possible US election outcome: no clear winner on election night combined with a high likelihood of split power between Senate & House. Instead of trying to conjure up an explanation of how the worst result is suddenly great in hindsight, I think that the real reason behind the unexpected rise are mechanical liquidity flows into stocks.

The S&P 500 is still stuck in a volatile correction, but the enthusiastic reaction after the election bodes well for a historically positive season – especially if we see clear, positive news on the vaccine front.