The US markets were expecting the unexpected for the month of November and the month turned out better than expected.
The presidential election consumed the lead up to November, with consensus saying the election would be contested. And it was, but ultimately with the results confirmed, we could look onto the transition. Vaccine news also added a boost to sentiment and risk markets took the news and rallied. Certain sectors’ returns broke records. It’s amazing how far we have come from the darker days of March.
There was cause for concern when Secretary of the US Treasury Mnuchin informed the market some emergency lending facilities would expire at the end of the year. The market took it in stride, recognizing the facilities were more perception than reality, proved by low utilization and broader recognition the events of March were liquidity-related and not credit-related. In the face of any concerns over these programs being withdrawn, credit spreads continue to grind tighter.