US equities rose again overnight as tech stocks led the gains, with the NASDAQ up 2.6%.

And with US election polls showing a decisive lead for democratic candidate Joe Biden, the market continues to get its ” MoJoe” on and appears to be factoring less chance of a contested election outcome, as well as an increased likelihood for significant fiscal stimulus post-election.

Whether those polls are reliable, of course, is another question entirely.

Stocks continued their relentless journey higher overnight powered by Tech, in conjunction with Apple and Microsoft, whose brands remain immune and entirely impervious to the pandemic.

Investors are increasingly relying on a massive fiscal stimulus package in the US to offset the flattening growth recovery. Tech stocks remain the apple of the market eye.

And with Biden continuing to build on his lead in national polls, that same stimulus package should push US dollar lower, which should help nudge along the pre-election rotation into cyclicals.

The market’s latest surge came as Wall Street appeared to mostly shrug off the latest signs that Democrats and Republicans are no closer to stimulus bliss, which would provide immediate aid to those Americans who need it the most amid an economy hobbled by a gnarly pandemic.

But that could mean there will be less room for cyclical catch up if a fiscal deal is smaller or even delayed.

While cash markets are gushing and revelling to a massive stimulus beat, equity derivative signals still offer up the cause for concern that the result could be a drawn-out affair.

However, arguably positioning could be more to do about hedging election day risk itself rather than the full out bear mode.

The November VIX future remains the curve’s peak and is 2.2 points above October but has a narrower 1 point premium to December, which would implicitly be wider if markets expected a quick resolution, one would think.

With the market still trading off stimulus nirvana, it’s inevitable with the polls in the US leaning towards a win for a Democrat sweep, there will be more scrutiny on Bidens tax proposals’ impact on corporate America if the polls hold up and as we near the election date. That pain is unavoidable and still to come.

China reports better than expected consumer spending

In China, “channel checks” on property contracts and retail sales at shopping malls during the Golden Week holiday indicate better than expected consumer spending. Generally, contract sales during the holiday have been strong, running 20%-80% higher than last year, and some are up over 100% due to a low base. Due to overseas travel restrictions and the long holiday, retail sales at shopping malls are also healthy.

The stay-at-home or staycation styled Golden Week in China will provide a most welcome boost to the services industry, which had been lagging in manufacturing in the post-pandemic recovery.

Provided the Covid-19 curve to remain flat, clearing this major close contact holiday event should reduce the flu fear factor and give an additional shot in the arm to the mainland economy.

Q3 earnings season

Third-quarter earnings season in the US gets underway with the oddest of backdrops: Treasury yield curve is approaching multi-year highs on presumed fiscal stimulus with the possibility of a Democratic sweep. The virus has suddenly become an afterthought even as the winter months approach and the Fed struggles to get its story straight, so what could go wrong?

Oil slips anew

Oil is down after a procession of short-term supply disruptions that have buttressed prices have fallen by the wayside.

At the same time, Libya is reported to resume production in the Shahara oilfield. And amid forever rising COVID-19 concerns, the Libyan oil supply’s permanency is proving to be one of the biggest headaches for OPEC and oil bulls alike.

Still, oil prices remain supported by broader markets where hopes for stimulus resonate, which would provide a welcome relief to the US oil demand side of the equation.

Although the COVID-19 case counts are spiralling worldwide, markets do not seem overly fussed about the global recovery stumbling just yet. Full-on lockdowns are not being contemplated, while broader testing and vaccine progress leaves the world in a much safer place today.

Just ask President Trump where oil markets are still digesting is rapid recovery.

The Baker Hughes rig count reported Friday shows only modest growth in activity (+4 w/w on the US’s oil side). And oil prices remain gingerly supported that US supply will disappoint through 4Q and into 2021 unless activity rates jump appreciably.

Equity and Oil markets analysis and insights from Stephen Innes, Chief Global Market Strategist at Axi