Special Situations strategies have been under pressure in 2020, both on their event and credit arbitrage books. Due to their long structural market beta, managers have underperformed early this year. They have retraced most but not all they have lost.

Since the U.S. presidential election on November 3 th, the USD has started a descent that may have legs under the new administration. The easing of trade tensions and an accommodative policy mix could put additional pressure on the DXY, which was down -1.7% since the election, to the benefit of European currencies.

If past elections provide any guidance, prospects for a Trump reelection look slim. History suggests that a second term reelection almost always requires strong growth. In most past election campaigns, polls did not materially shift after October.

Momentum is a strategy which buys stocks trending higher and sells stocks on a downtrend within an index. It is systematic and has no considerations for earnings, valuation, or other fundamental metrics such as dividends.