There are now seventeen states that have joined Texas in the lawsuit that sits with the Supreme Court, and attempts to delay the Electoral College vote and prevent four states (Georgia, Michigan, Pennsylvania and Wisconsin) from casting their Electoral College votes for Biden.  

The Supreme Court has given the defendants (the four states) a deadline of Thursday at 3pm to respond. 

As a result, we are getting a tick up in the VIX today, and a slide in stocks. 

What would be the first stock to sell if the election outlook were to grow murkier if not overturn?  Telsa.

Tesla has made a huge run since the Pandemic was globally recognized back in early March.  As of this morning, the stock was up 12x from the lows of mid March. 

The negotiations continue over a second Covid relief package.  While both sides have shown optimism in getting a deal done, it seems like "smaller" is the likely outcome.  

McConnell seems to be dug in and confident that the Democrats are coming to his number, which won't include state and local government money. 

With that, the stock market has probably well priced in another half-a-trillion dollar bridge to get consumers and small businesses through the next few months.

Meanwhile, today is 'Safe Harbor' deadline for the election.  This is the final day to resolve election disputes, assuming the Electoral College would vote six days from now.  But the election challenges have now (as of today) been elevated to the Federal Supreme Court — one from Pennsylvania republicans, and the other, a lawsuit filed by the state of Texas, attempting to delay the Electoral College vote and prevent four states (Georgia, Michigan, Pennsylvania and Wisconsin) from casting their Electoral College votes for Biden.  Scotus has put the Texas suit on the docket. 

This is an event that markets have been ignoring and assigning virtually zero risk to.  The chances of an election overturn at the Federal Supreme Court may not be high.  But it's not zero.  

Meanwhile, the VIX ends the day near the pandemic-era lows. 

Back in the depths of the Global Financial Crisis, while the world was suffering and asset prices were collapsing, China began stockpiling cheap commodities.  With about $1.7 trillion of U.S. dollar reserves, they went on a commodities buying binge, picking up the world's most valuable natural resources on the cheap. 

That led to charts like these …

The jobs report this morning had few surprises. 

However, it is being positioned as a "dire" report, as a political tactic to gain more leverage in stimulus talks.

Let's look at the facts …

The new jobs added in November came in lower than expected, but still well above the average pre-pandemic monthly job gains.  Slower job growth shouldn't be too surprising given that certain states went back into economic restriction mode over the past month.  

Yesterday we talked more about the set-up for inflated economic growth next year, inflated prices and higher wages.  

With that, let's talk about tomorrow's jobs report, which will include a read on wages.

First, unemployment is expected to continue the move lower.   

Powell and Mnuchin have been on Capitol Hill the past two days.

Yesterday, the Fed chair said that "in the medium term there is upside risk."

"Upside risk" to the economy means, hotter growth … driving hot inflation. 

This is what you get when trillions of dollars in government and Fed stimulus meets the prospects of a 'return to normal' (via a vaccine). 

We've seen inflation in asset prices already.   We're going to see (more, and persistent) inflation in daily living expenses.  And to maintain the standard of living, we will have to see wage inflation (higher wages). 

This backdrop means higher market interest rates are coming.  And the government bond market is beginning to reflect it. As you can see in the chart below, the ten-year yield is threatening the break of a multi-year downtrend. This would support the thesis we discussed last month, that the vaccine announcement may have been the catalyst to end of the nearly forty-year bull market in bonds (bond prices go lower, interest rates go higher).

Stocks were up big today on news that the Senate had a bi-partisan proposal for a second relief/stimulus package.

The number was $908 billion.  That's far short of what Pelosi has looking for.  And, if deployed prior to January 20th, that's far short of what Biden would need to implement the big clean energy/economic transformation plan.

So, as we've been discussing, it's unlikely to happen.  What today's proposal could do, is open the door for Trump to repurpose the nearly half a trillion-dollars in unused funds from the original Cares Act, and deploy it by Executive Order. 

The prospect of a second stimulus package, bridging the economy to a vaccine, is yet more fuel for the fire under asset prices.  With U.S. stocks on record highs, there is money searching for value. 

With that, let's take a look at a couple of charts (outside of the U.S.) that look like there is plenty of room to run, in a world where cash is being devalued against asset prices …

The broad stock market (S&P 500) finishes the month of November up 11%.  

Among the biggest movers for the month have been those companies that would benefit from the Biden economic plan, which outlines a wholesale transformation of the economy, to clean energy.

Within that bunch of clean energy stocks, electric vehicle stocks have been the favored bet.  None have been more favored than Tesla.  Telsa was up as much as 52% for the month.   At the close today, the stock is up 584% on the year. 

Let's take a look at six publicly traded electric vehicle companies that are fighting for market share.  

Lordstown …