SPTS

I think it's safe to say, last week more than lived up to expectations. We may never see a US election like it again. What is remarkable is how relaxed traders have been throughout.Many expect the central bank to announce further easing measures in December, once the election is resolved and with new economic projections to guide them.China Trade Balance and FX Reserves released tomorrow. Both may slow due to the long October holiday, but it will take a big downward surprise in exports to trip up the bullish China story on Monday morning.

After reducing equity risk in portfolios over the last few weeks, we suggested last week the "selling" was likely overdone.It was quite the reversal. The rally pushed the market back above the 50-dma and lower highs' previous downtrend. Such sets the market up for a retest of all-time highs next week.However, before you get all excited and go throwing your money into the market, you may want to step back and re-evaluate your risk.

We've grown accustomed to the "new normal": Stock market ebullience even as the country suffers through a distressing confluence of hardships.It is deeply disappointing to witness an election where seemingly everyone comes out of the process only further disillusioned.This is a critical juncture in our nation's history. Let's agree to disagree on many issues. Let's be civil.

We're now only a few days from the most pivotal of elections.COVID cases here at home remained highly elevated all summer. And if U.S. infections now follow Europe's trajectory, our nation is facing a dark and challenging winter.The Fed could well be on the cusp of a historic predicament.

It is not a prerequisite that an overwhelming majority of the country approve of the president for US equities to go up.It’s no secret that the US equity market has historically performed best with a divided government.This election is about who’s going to be the next president of the United States - it’s not about which sector may outperform next year, or where the stock market may be in the next four years.

European bond prices have an unmistakable correlation to European COVID infections.The strategy of ensuring the banking system remains well capitalized - while letting market-based finance run wild - may have plausible theoretical underpinnings.The "penalty rate" issue is key to mitigating moral hazard.

At least for now, for the markets it's weirder the better.With Biden's lead appearing increasingly insurmountable (with less than four weeks to go), we can assume there was this week significant buying associated with the partial reversal of market hedges.Chairman Powell made his contribution to Weird Week.

It doesn't take much to set reflation expectations on fire these days.With US interest rates near zero (or negative in some parts of the world), a mild uptick in yields inspires a new round of forecasts that a sustained run of higher inflation has finally started.The immediate cause of the higher rates seems to be renewed prospects for a stimulus package passing muster with Republicans and Democrats in Washington.The latest uptick is far from definitive proof, but perhaps it's a start… or just more noise on the path to even lower realms.