Welcome to Thoughts on the Market. I'm Mike Wilson, Chief Investment Officer and Chief

U.S. Equity Strategies for Morgan Stanley. Along with my colleagues bringing you a variety

of perspectives, I'll be talking about the latest trends in the financial marketplace.

It's Monday, November 16th at 1.30 p.m. in New York, so let's get after it.

November is the month when our macro team gets together to discuss our year ahead outlooks across all asset categories.

It's a rigorous two-week process that forces all of us to collaborate and think about the next 12 months

rather than the next 12 hours. However, with an election in the U.S US this month and a global pandemic ongoing, this

year's process provided some unique challenges.

As is typical, the 12-month view is often easier to determine because it comes down to things

that can be analyzed and forecasted, namely earnings and interest rates.

On this score, our call this year has been very consistent.

We've been well ahead of the consensus on the recovery story and more specifically earnings.

We have also had a much more bearish view on bonds,

especially long dated ones where we think rates are likely to head much higher as the

economy fully reopens next year. Today we got more good news that supports our view on both.

Another vaccine was announced today

with 94.5% effectiveness in its trials. This tops the 90% effectiveness of the prior

vaccine announced just two weeks ago, which was an upside surprise also.

The initial reaction in equity markets was bullish, but not for all assets.

While the S&P 500 rallied along with the Dow Industrials, the NASDAQ quickly faded

with the long end of the bond market selling off.

This is very reminiscent of the price action we witnessed two weeks ago

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