The markets have been driven higher recently by a slew of positive developments, including Pfizer’s (PFE) vaccine candidate and post-election relief, says John Stoltzfus, chief investment strategist at Oppenheimer Asset Management
“There’s a certain amount of relief in terms of the election where we believe we really do have a distinct winner in terms of the election,” Stolzfuz told Yahoo Finance Live.
However, he says the market is predicting Congress will stay divided.
“We think the market is hopeful that the Senate will remain in control of the Republicans, limiting progressive’s advances here,” he added.
As for a vaccine, Stolzfus said, “We believe that in the 1st quarter of next year — even though many people say ‘I’m not taking that, I’m not going to try it’ — they will be so fed up with the semi-lockdowns, the worries, the masks, that they’re going to line up for the vaccine.”
Among other factors driving the markets higher, “the Fed continues [to be] magnanimous in its support” and “Q3 earnings have come in remarkably better than was originally expected,” he said.
Better-than-expected recent GDP, ISM manufacturing data and unemployment figures have also helped buoy stocks.
“Our favorite sectors are consumer discretionary, information technology, industrials and financials, and we like materials because we think we are going to get a global economic recovery on the back of all this,” he added.
Stolzfuz says possible new lockdown measures would be “a challenge for equities.” However, Dr. Anthony Fauci, the nation’s top infectious disease expert, recently said COVID-19 won’t be a pandemic for long thanks to vaccine developments.
The new norm of wearing masks all the time is an encouraging trend says Stolzfuz. “People are wearing the masks, all kinds of them, and we think that’s very positive.”
“The danger is the bars, it’s the gyms, near term, you have to watch those super-spreader areas where people gather and they exhale a lot,” he added.
Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre
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