Equities excel and central banks curb volatility

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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.
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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.
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