Equities excel and central banks curb volatility

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Equities Excel in November

• Investments moving into domestic stocks on sector rotation.
• Russell 2000 a target of the shift amid optimism over economy.
• Janet Yellen’s nomination as Treasury Secretary bolsters stocks.
• Expectations for fiscal stimulus to come sooner rather than later.

Central Banks Contain Future Volatility in Some Markets, Not All

• Central banks are now adept at managing short-term rate expectations.
• Fed Funds show low expectations for rate moves over next two years.
• Cost of at-the-money options in equities higher than pre-pandemic levels.
• S&P 500 and Nasdaq-100 trading at high multiples of earnings, GDP.