U.S. Equities Hover ~Flat After Huge Rally

Catch Up Quick

• The U.S. Justice Department sued to block Visa's $5.3B purchase of Plaid

• Philadelphia still has ~40K votes to count as Biden’s lead grows in PA

• San Francisco voters approved an "Overpaid Executive Tax" for CEOs

• Cannabis company Aphria agreed to buy SweetWater Brewing Co. for $300M

• Churchill Capital is rumored to be working on a potential bid for AT&T's DirecTV

• Shares of cannabis stocks dropped on Wednesday despite recent legalization

• TikTok competitor & short-video app KuaiShou filed for a ~$5B Hong Kong IPO

• 57M people tuned into election coverage Tuesday, down from 71M in 2016

• New coronavirus infections surged by roughly 20% over the past week

• ByteDance, the owner of TikTok, is looking to raise $2B at a valuation of $180B

Friday Insight

• Shares of Health Care sector incumbents soared sharply late this week after election results hinted at Republican Senate control— a divided Congress implies gridlock that will obstruct the passing of health care legislation, leaving more business for the private sector

Thought of the Day

• To expand on the above, many speculators opined the market was pricing in a “blue wave” prior to the election, which has not exactly been the case

• Predicting both the stock market and election results appear to fall under the category of a “fool’s errand” due to historically large recent margins of error in both realms

• A more reasonable and perhaps insightful task is analyzing why observed results occurred

• Furthermore, the gridlock described above also translates to the scenario which (while not solidified) firmly appears to be the case: a Biden presidency with a divided Congress

• Absorbing this picture, stocks have posted two of the sharpest inclines of the year late this week, leaving many curious as to why, given the inaccuracy of election polls inducing a stigma of uncertainty that has historically driven equities lower

• In short, we firmly believe that the current case is the voice of financial markets holistically shunning political overreach, as investors know that said gridlock will make legislative encroachment towards virtually all areas of the economy very difficult

The Bottom Lines

• However, it’s easy to forget that we are in the midst of a global pandemic, in which slow government responses certainly take tolls, such as the inability to pass pre-election stimulus and the resulting volatility induced on the market during the past few weeks

• Recently, chief economist of The Center for Economic Policy Research Dean Baker told Axios Media "A second dip is very likely in the absence of major stimulus from Washington"

s

s