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People, and markets alike, crave certainty whether the outcome is what they expected or not. Once there is certainty, it becomes easier to adapt to the rules. So, with the presidential election behind us we have one more thing to add to the list of things we know with certainty. Political coverage has already started to taper down, and for that I am thankful.

But even with the election in the rearview mirror, COVID still seems be running rampant in many parts of the country. These are some questions I’m pondering as we head into this last month of 2020.

Who will control the Senate?

We likely won’t know the outcome of the Senate race until January, which certainly rhymes with the agonizing days it took to count votes during the Presidential race.

If Republicans maintain control of the Senate, Congress will remain split. If Democrats win the Senate, they’ll have a political trifecta, controlling the House, the Senate, and the White House. The last time Democrats held all three was during the first two years of Obama’s administration.

One party controlling all three doesn’t always guarantee things will get done quicker. How quickly things will get done in the age of COVID also remains to be seen.

What would another lockdown mean?

Earlier in the month the US was reporting more than 128,000 new COVID cases in a single day. Does getting the virus under control mean less than 100,000 per day? 50,000? 10,000?

After two consecutive quarters of negative GDP, the working definition of a recession, we saw a spike in the third quarter. But there are more new cases of the virus now than there were then. If we follow Europe’s lead go into a second lockdown for the year, could we be back on the path to negative GDP?

Unemployment is at 6.9% as I write this, which is certainly better than the 14.7% from March, but it still almost twice as high as the 3.5% unemployment rate we had at the end of 2019. Could another lockdown reverse some of the ground we’ve made up since those dark days of March?

How will investors react?

It’s difficult to predict what the stock market will do in the short term, there are just too many variables at play.

Back in March the Fed slashed rates twice. The second time they dropped rates to 0.00%-0.25% and met on an unscheduled Sunday to do so. Some would say that this was good news, that low interest rates might spur equity investment and economic activity. The S&P dropped 12% the next day.

Maybe that second rate cut signaled that the economic outlook was darkening and emergency action from the Fed freaked investors out. You can choose any narrative you’d like, but exactly what happened the next day was impossible to predict.

So what do we know?

We know Joe Biden will become the 46th president of the United States.

Arguably, what’s more important for markets, is that we know Jerome Powell will remain Chairman of the Fed until at least February 2022. We also know that his intent is to keep interest rates low for the foreseeable future.

We know that Pfizer has a vaccine that’s 95% effective and could be available to high-risk populations by the end of December.

We know that market drops feel much worse, and much longer, in the moment than when we go back and look at the data after-the-fact.

We know that our financial plan’s success is more dependent on our habits and our ability to stay the course during difficult times than anything else. All the other stuff is just noise.

Let’s try to hang on to what we do know going into this last month of 2020 and as always, if there’s anything we can do in the meantime you know where to find us.

Have a wonderful, and safe, Holiday Season!