Chart of Interest – A Turning Point?

For over a year now, capital markets have looked at global financial data through a lens necessarily considering the potential consequences of politics and health conditions.  With the US elections now behind us, the likely path of political actions is becoming clearer.  Questions regarding additional stimulus have moved from “if” to “how much” and expectably during the first quarter of 2021.

If the historic playbook holds true, another stimulus injection will translate to an upward bias for risk assets, i.e., stocks.  This could also lead to rising interest rates, which, at current levels would not initially be particularly problematic.  But investors need to remember that rising rates are not a problem until they are.  And we typically only know in hindsight when that shift occurs.

But what about the impact on the capital markets of the ongoing COVID-19 pandemic?  The global economy has exceeded expectations in its ability to navigate this pandemic and, while the costs have been harsh and real, economic conditions have fared much better than initially expected.  Yet, there continues to be a “fragility” in the markets regarding the still unknown way in which this pandemic may ultimately play out. 

The world has waited expectantly for an optimistic breakthrough that may create conditions leading towards meaningful and sustainable improvement.  And now, the distribution of vaccines has offered hope that we have turned the corner, yet still with guarded optimism.  Has this step begun to move the needle?

While still early, the data below from The COVID Tracking Project at The Atlantic shows an encouraging turn in U.S. trends measuring COVID-19 metrics as vaccines become more widely distributed.  As testing continues at a high rate, the seven-day average of daily cases has begun to meaningfully decline.  And, while not as pronounced, hospitalizations and deaths also look to be showing optimistic signs of improvement as their trends also look to be rolling over.

Should these pandemic trends continue to improve while the political landscape becomes better understood, two major uncertainties will have begun to recede, giving investors better visibility into the health of, and opportunities within, the global economy and capital markets.  While maybe a small step, an important one in the right direction.

Quantitative Advantage, LLC (QA) is an investment advisor registered with the Securities and Exchange Commission and is a limited liability company organized in the state of Minnesota.  Registration of an investment advisor does not imply any specific level of skill or training. QA Wealth Management is a division of QA.

This information has been prepared by QA, is provided for informational purposes only and does not constitute investment advice. It contains general information, is not suitable for everyone and is subject to change without notice. The views and opinions expressed in this report are solely those of QA and are current as of the date of writing.  While the content is provided in good faith to provide a general commentary of current market factors and conditions, the views and opinions expressed are limited in scope and QA makes no representation or warranty as to the accuracy or completeness of the information provided. Past performance of the global investment markets is not a guarantee of future results.

For more information about QA, its investment programs, fees, and the risks associated with the investments which QA may make or recommend, please review QA’s Form ADV disclosure brochure, which is available at, or upon request from QA’s compliance department by telephone at 866-767-8007, by writing to 10400 Yellow Circle Drive, Suite 303, Minnetonka, MN 55343, or by email to Please review the Form ADV disclosure brochure carefully before or at the time you enter into an agreement with QA.