Elections: Uncertainty over whether there will be a winner on election night, and President Donald Trump has signaled he may be open to challenging the results.
Stimulus: Can we get a last-ditch deal between Nancy Pelosi and Steven Mnuchin? The markets moved lower Wednesday when no deal was announced, so traders still care.
Reopening: Better economic data this week (Consumer Confidence, Chicago PMI, ADP Payrolls, Pending Home Sales) have to be balanced against an increasing sea of layoffs (Shell, Dow, Disney, Marathon Petroleum). There will be more layoff announcements as earnings are announced.
Treatment/vaccine: Will there be any phase three trial news on the vaccine?
China trade war: Any retaliation by the Chinese is likely to fall on megacap tech and semiconductor stocks that are market leaders.
Valuation: When Apple — the biggest stock in the U.S.— moves in a better than 20% trading range in a month, you know traders are not sure what is going on. Valuations wax and wane depending on the reopening outlook and vaccine hopes, none of which will be resolved any time soon.
All of this should be making traders nervous. With valuations high, there’s an awful lot that can go wrong.
One last positive note: As we enter earnings season, the early reports have been almost all positive, and earnings have been slowly creeping up, not down.