What is driving risk assets higher?

EQUITIESMOVED HIGHER in early Asian trade last Thursday after a robust performance from Wall Street on Wednesday. US equities not only ended the session higher, but the S&P 500 is making an attempt to break out of the consolidation zone it has been stuck in Other risk assets also reBrent Crude climbing to April highs, copper rallying 1.7% and commodity currencies higher against the US dollar. That typically looks like a global risk-on mindset. While there is no specific data release backing the across the globe gradually WHO concerns about a !" !!! # $ impact the bullish mode, as the market is currently more focused on the bright side of the story. ' ahead. Traditional models of little use anymore. It is not a secret that earnings ( ) els not seen before. We are certainly in different times, ferently. The increase in fiscal spending and monetary policy stimulus are unprecedented. After passing a $2 trillion economic relief package, the Senate may ger one, after Republicans and Democrats reached a middle ground. The reached $7 trillion, almost $2.8 trillion higher from ful central bank may still implement further easing measures, according to the latest minutes from the FOMC. 3 ) are: Will the stimulus meathree quarters of terrible earnings and economic damage? 4 ( months?

· Will there be a second wave of infections leading to new lockdowns?

Are we going to get a vaccine or treatment by year-end?

Only a crystal ball can find answer to these questions, so what we are likely to see over the upcoming weeks and probably months is investors acting upon narratives. In my opinion, the markets are currently reflecting the best-case scenario and let us hope they are correct. It is great to be optimistic about the future, but there are a lot of reasons to be cautious. For bullsounds like a good strategy at this stage.