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A Tale Of Two Markets: Visualizing The Huge Impact Of The Covid Vaccine Across Assets

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A Tale Of Two Markets: Visualizing The Huge Impact Of The Covid Vaccine Across Assets Tyler Durden Wed, 11/25/2020 – 17:41

The story of the market since the March lows has been one of two parts, the first of massive FAAMG/tech/growth/momentum outperformance, and a second one in which value and cyclicals burst higher during a 15-sigma one day rotation out of momentum names that left countless quant funds near ruin; the only question is what date is the correct inflection point.

According to one strategist, Deutsche Bank’s FX strategist Alan Riskin, that day is August 11, “when news of a Russian vaccine retrained the mind on how markets might respond to further positive vaccine developments.” The chart below shows asset returns from March until August 11, and is a representation of market price action dominated by risk negative virus news, versus a period when the virus story shifted progressively to ideas of an eventual vaccine helping risky assets.

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