The stock market’s rally to a record on stimulus and vaccine hopes leaves little room for error


Traders on floor of the New York Stock Exchange.

Source: New York Stock Exchange

With the inauguration — and the risk of disruption — now over, what’s next for markets? 

The S&P 500 has risen 15% since the election to historic highs on a series of macroeconomic hopes that have driven sentiment, technical levels, and earnings expectations to very elevated levels.

The good news: So far, those hopes are coming to fruition.

The bad news: The stock market has run up big and there is very little room for error.

The macro: plenty of hopium

The bedrock of the market rally to historic highs is the trifecta of additional stimulus to get through the Covid winter, a smooth and effective vaccine…


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