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Dear clients and friends,

At Perseus Wealth it is important that you are well informed about what is happening in the markets.  The following are what are believed to be the most critical topics that deserve your attention this month. If you have any questions or would like to continue a conversation, we would appreciate the opportunity to hear from you.

What’s Happening? Three impactful events and a continuing trend dominated financial news and markets in November and will likely continue to do so going forward. The three “headliners” were the U.S. elections, promising news of vaccines and a record surge of COVID-19 cases/hospitalizations/ deaths, accompanied by ensuing shutdowns; the ongoing trend, in evidence since the second quarter, are economic data reports showing a damaged U.S. economy on an upward trending pathway to repair. Let's take a snapshot of each of these, briefly review how the markets have reacted to each so far and evaluate what the longer term potential impacts may be.

The election brought out the highest percentage of Americans to vote in over a hundred years (1). The results were a Democratic President-elect in Joe Biden and the likelihood of a “split” Congress: a Republican controlled Senate (pending two Georgia run-off elections) and a Democratically controlled House of Representatives. The split nature of the major government branches was received positively by markets, as the S&P 500 rallied 7.4% in the four days following November 3rd. Many believe that a more balanced political structure in Washington reduces the possibilities of extreme policy-making that could be potentially disruptive to the economy.

Pharmaceutical companies Pfizer and Moderna published news of exceedingly positive COVID-19 vaccine testing, showing efficacy rates greater than 90% for each of their differing approaches to vaccines. Positive vaccine developments provide greater confidence in economic activity returning to normal (pre-COVID levels), possibly as soon as mid-2021. The markets immediately reacted sharply to the news, sparking a sharp rotation into previously over-sold areas such as hospitality, travel and small-cap stocks and reducing the eight month investment concentration in overbought areas such as large-cap growth and technology. Hopefully, the positive vaccine news will make it easier to absorb near-term economic disappointments and have stronger confidence in the long-term future while continuing to wait for policymakers to finally reach agreement on a second, more targeted assistance program for those most financially impacted by the pandemic. The vaccine news clearly provides a positive backdrop to the stock market as we head into the final month of the year and 2021.

As a direct counterpoint to the positive vaccine news, the spread of COVID-19 is accelerating faster than ever, as nearly every indicator of the virus's spread across the U.S. continues to set new records (2) throughout the month. Numbers of new cases have increased exponentially, hospital capacities are reaching crisis levels and U.S. deaths are rapidly approaching 300,000 in the 9 months since the introduction of the virus to the country. Contravening (to an extent) the hopeful vaccine news, markets reacted negatively to the increasingly horrific statistics, especially in anticipation of the looming holiday “gathering” season and re-introductions of increased government restrictions on meetings, indoor business activities, etc. One potential area of improvement over the painful financial impact of the previous lockdowns is the level of new infrastructure developed in its wake which may help to support the economy.

Although the country’s GDP is still predicted to be negative for the entire year, the economy continues to show recovery from the initial shock of the pandemic – a shock that initially drove a majority of economic indicators to “apocalyptic” levels in April and May. Retail sales now exceed pre-COVID-19 levels (3) and the most recent reading from the St. Louis Fed Financial Stress Index now suggests below-average financial market stress (4). The pace of improvement, however, has slowed: economic indicators such as the Conference Board's Leading Economic Index (LEI), while still improving, suggests slowing improvement across the economy in the final months of 2020 (5).

What It Means: Most people agree that the elections are behind us, although the historically clear path of transitioning power is proving less straightforward this time than normal. Hopefully, legislators now have a clearer understanding of “who the players are” and can get to the work needed to continue bringing the economy back to its pre-COVID-19 levels without the potential “blowback” from an impending election. Vaccines have clearly accelerated the expectation of a near term 2021 recovery and the markets have already largely built in those expectations as they race to new highs. However, we will have to make it through the winter months of the virus's exploding spread first, along with the restrictions being enacted with its spread. Although economic indicators signal a continued recovery, the momentum has slowed down from the fast pace seen in Q3. Taking all of the above into account, there are multiple reasons to be optimistic about the long-term future of the markets but the likely volatility associated with the conflicting short term events has us remaining cautious in the near-term.

Best Always,


John and Sean



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that any strategy will be successful.


(1) Galston, W. A. (2020, August 14). Election 2020: A once-in-a-century, massive turnout? Brookings.

(2) Li, S., Kalin, S., Tucker, E., & Frosch, D. (2020, November 23). U.S. Hospitalizations Coronavirus Hit Another Record. WSJ.

(3) FRED Economic Data. (2020a, November 12). St. Louis Federal Reserve.

(4) FRED Economic Data. (2020b, November 19). St. Louis Federal Reserve.

(5) The Conference Board Leading Economic Index® (LEI) for the U.S. Increased in October | The Conference Board. (2020, November 19). The Conference Board.