Bond markets have had quite a ride since Election Day. The 10-year Treasury yield had been climbing very slowly in the months leading up to the election as the economy improved, but possibly also in anticipation of a potential Democratic sweep that could lead to a larger stimulus package. As shown in the LPL Chart of the Day, as polls were starting to close on Election Day, the 10-year Treasury yield had moved above 0.90%, a level at which it had not closed since June and then only barely. But then early results out of Florida and North Carolina let us know that this would be a closer election than many thought, and yields fell dramatically.
The election is over, but the questions are mounting. We don’t know who will be the next president as of Wednesday morning, but we do know that stocks tend to do well the final two months of an election year. “Once the uncertainty is over, stocks tend to rally in November and December, with November the best month of the year during an election year,” explained LPL Financial Chief Market Strategist Ryan Detrick. “Of course, 2020 isn’t like any other year, and we still could be a ways away from who the winner will be.”
Dear Eastwood Wealth Family,