Following a 5.6 percent decline in the last week of October, the S&P 500 index rallied by an impressive 10.75 percent in November as some “worst case scenarios” regarding the election did not materialize. For example, fears of a contested presidential election reportedly caused some cities to board up windows as concerns about possible riots mounted. Given how contentious the atmosphere was heading into the election, a number of investors raised cash or “hedged” portfolios. Clearly, some of those hedges have been unwound over the past few weeks.
Some of the biggest rallies were seen in laggards such as energy and financial sectors.
In addition to the election, there were also worries about the rise in the number of COVID-19 cases as well as further restrictions on activity by some states. Moreover, Congress and the White House could not agree on the next round of coronavirus stimulus.
Adding to the post-election rally was positive COVID-vaccine news from Pfizer (BioNTech) and Moderna citing efficacy rates above 90 percent. While it will take several quarters to ramp production of the vaccines, if approved, investors are looking ahead to a better 2021.