An ephemeral rally?

Edito Despite the absence of an official result, the US elections completely dominated the past week’s news flow which spurred a strong rally across all risky assets with a staggering 8% rise in the Eurostoxx index and a decline in equity volatility to 28%. While understandable, this reaction does not seem to take into account the risk of deadlock associated with the lack of a majority in Congress during the first term of presumed new US President Joe Biden which could slow down decision-making process on even modest stimulus. In addition, concerns about COVID and its impact on global economic activity are expected to quickly find their way back to the financial markets’ agenda .