The markets rally is this close to becoming the ‘greatest of all time’

September 2, 2020, 9:14 AM UTC

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Good morning, Bull Sheeters. European stocks and U.S. futures are climbing again as a host of economic indicators point to an improving economic outlook and a recovering labor market. The S&P 500, meanwhile, is well on pace to score its greatest rally of all time.

Let’s see where investors are putting their money.

Markets update


  • The major Asia indexes are mixed in afternoon trading, with Japan’s Nikkei up nearly 0.5%.
  • Saudi Aramco shares are down 0.9% in morning trade. That’s after a report that Saudi crude imports to the U.S. hit a 35-year low in August.
  • Australia managed to dodge recession during the global financial crisis, but it hasn’t been so lucky this time round, with GDP falling by a record 7% in the latest quarter.


  • The European bourses opened in the green with Germany’s Dax up more than 1%.
  • The euro is flat this morning. It was cruising to a 2-year high yesterday when the ECB’s Philip Lane declared that euro appreciationdoes matter.” Those words sent the common currency crashing back down to Earth. Spoiler: he’s correct.
  • Former ECB President Mario Draghi wants the Euro zone to think creatively about the €750 billion coronavirus bailout package, urging governments to invest in sectors that will spur job creation rather than to hand out subsidies to prop up the status quo.


  • The U.S. futures again point to a strong open. That’s after the S&P 500 and Nasdaq closed at fresh all-time highs yesterday, led by Apple and Walmart.
  • Walmart+, the retailing giant’s answer to Amazon Prime, will go live on Sept. 15. In pre-market trading, shares are up nearly 1% after big gains on Tuesday.
  • The Republicans and Democrats are still far apart on a possible CARES Act II, but Treasury Secretary Steve Mnuchin testified yesterday that more stimulus spending is “critical to the economic recovery.” It’s campaign season. Expect both sides to come closer to a deal.


  • Gold is down, trading near $1,970/ounce.
  • The dollar is up slightly.
  • Crude is higher with Brent climbing above $46/barrel.


Greatest of all time

The S&P 500 closed yesterday at 3,526.65, reaching its seventh all-time high over the past 10 trading sessions.

Usually, in election years, investors sit it out in September and October. They don’t jump back in and trade until mid-November once the dust has settled.

But this year, the bulls are out in force ahead of Election Day. If the S&P were to climb a further 104 points—a mere 2.9%—by Election Day, we would be crowning this the GOAT rally. Yes, it would be the “greatest of all time,” according to BofA Securities, surpassing the previous record-setting rally from 1938.

Tech stocks and the Fed are the biggest drivers of this bull run. In fact, if the S&P were to magically reconstitute itself as a tech-exclusive club, the index would be trading roughly 20% higher.

And if it were comprised entirely of banks and energy stocks? The S&P would then be trading more than 40% below yesterday’s close.

To repeat: September is historically a slow month for stocks, particularly in presidential election years. Judging by this morning’s futures rally, you can throw out that history lesson.


Have a nice day, everyone. I’ll see you here tomorrow. 

Bernhard Warner

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Today's reads

Net-worth watch. Zoom Video Communications CEO Eric Yuan is having one heckuva pandemic. Yuan's net worth soared at one point yesterday by $5.2 billion after the stock took off, boosting his personal fortune to almost $22 billion, according to the Bloomberg Billionaires Index.

Don't believe the polls. That's the message from JP Morgan Chase equities strategist Marko Kolanovic. The betting odds makers show a tightening race, one that President Trump could still win. And so Kolanovic is telling investors not to price in a Joe Biden victory. “Implications could be significant for the performance of factors, sectors, COVID-19 winners/losers, as well as ESG,” he says.

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