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No movement on a new stimulus package last week left investors watching and waiting. Stocks fell slightly on the lack of movement, with the S&P 500^® index losing 0.5 percent. That broke a string of three consecutive weekly gains and left the index roughly flat over the past two weeks. With the election just one week away, volatility barely budged, and has itself been mostly flat for the past six weeks. 

Despite no additional fiscal stimulus, surging virus infections, and an election now just two weeks away, U.S. equities managed to deliver another week of gains, albeit by the slimmest of margins. The S&P 500^® index gained only 0.2 percent, but it was the third straight week of higher prices, after four straight weeks of declines. The index remains 2.7 percent below its September 2nd peak of 3580. The VIX index of implied volatility rose slightly to 27.4 from 25 the prior week, and although that is down from early September, it is elevated relative to the five-year average of 17. History suggests that volatility should peak approximately two weeks ahead of the election, followed by a steady decline, but that remains to be seen.