Washington is on tenterhooks - more so than the stock market, which tends to hold-together except when stunned by rare out-of-form tweets or attempted interventions aimed at creating more confusion among voters.
Having reportedly "capitulated" from $500 million, the GOP's latest $1.8 trillion COVID-Relief package offer has been flatly rejected in a Saturday Letter, by House Speaker Nancy Pelosi (whose latest offer was a $2.2 trillion package). So now I suppose a general consensus will be to split the difference; to do it.
Meanwhile...aside the usual banter (and it matters) about 'Stimulus for many suffering during Covid', many physicians continue to see lots politics playing a role in what they see as deliberate exercises of obfuscation. This doesn't help parts of the public grasp the seriousness of the moment. It is however totally befitting the situation that there's a greater focus on 'antibody therapeutics', as I have thought for months this needed to be key, before eventual vaccines.
Executive summary:
- Markets are in reasonable positions to 'discover' higher S&P ground; after Columbus Day, which will see credit markets closed, but stocks trading all day in the normal manner; which might be only slightly subdued;
- The Covid-19 situation crushed so many areas of investing; that there is an obvious list of sectors that will benefit by emerging from collapse; at the same time there will be likely contractions in overpriced leaders, as participation widens; more importantly in the real small business world;
- Gains from the future have been pulled by some rebounds in 'super-caps' however, depending on the Election, we might see longer-term investors rush to the exits, to lock-in Capital Gains at current tax rates; although for sure lots depends on expediting therapeutic antibody treatments, which in a sense gives motivation for 'urgent funding' to multiple companies;
- Hence tax-motivated moves are logical; but how substantially is still early to determine (if so may set-up natural early 2021 lifts), so it may become an interesting swing for top-gainers later in this Quarter (still variable);
- I'd long contended that more funds should have been allocated to smaller companies and specifically 'antibody-based' drug developers; than for the vaccines the established pharmaceutical industry generally lobbied for in an obvious way; sure we wish all success; but they're not sole players;
- So whether Regeneron, Lilly... or Sorrento.... the focus in on 'antibodies' I have believed, and glad to hear Dr. Gottlieb (former FDA Chief) concur;
- One of the reasons I am optimistic for Sorrento relates to their wide base of antibodies (a 'library' of sorts); and perhaps need for partnerships so as to have sufficient production capacity for some portions of the population;
- Dr. Gottlieb concurs as well about rationing this for some time; both for of course high-risk populations and maybe healthcare workers;
- The sad part of this is Dr. Gottlieb feels there's no viable vaccine coming soon; and impossible needs for antibody treatments to fulfill; so while this is great for Sorrento 'if' their STI-1499 shows good efficacy; it's really sad for society;
- For sure that's the core of my primary interest in this controversial stock that's clearly presenting itself as moving toward status as more than just a scrapping biotech, but a pharma company targeting various programs;
- Meanwhile the market focuses about Donald & Nancy stimulus bickering; they really must get that done and the S&P will at least hold a high range for the moment as it already seems to have adjusted to the shifting polls.
The vitality of this market is reasonably questioned as it shuffles with political news and a lot of skeptics. Ever since calling the March 23rd low, I reversed from bear-to-bull (most of the time; with reservations); but more importantly in a sense, I discouraged getting influenced by those calling for things such as a debt-based chaos, runaway inflation or any of that; though eventually sure the market will be influenced by such things; but it's quite a long ways off if at all.
And especially distant if we don't normalize the situation with China (not back to what it was, but as Dr. Kissinger suggests, some sort of 'rules of the road' to deflect things getting totally out of hand). That also tempers global inflation potentially. In the meantime, we do have the highest weekly 10-year Treasury close; and that reflects a 'good thing'. The Chinese currency came back and even the Euro is outpacing the Dollar this week.
The world wants to grow, not be suppressed by Covid; and regardless of what occurs from (for example) the tax-related roiling or the politics; the next year is shaping up to be constructive, especially if 'antibody therapeutics' work well in advance of a reliable trustworthy vaccine; allowing people to stop bickering so much about masks or no masks, distancing or not; and rather emerge, mingle and go about their lives... knowing there's a treatment 'if' it is needed.
In sum: aside discussions about politics and yay or nay on Stimulus; it remains a somewhat complacent market after the week's earlier swings of course. And this will continue with stocks trading on Columbus Day.
One thing stands out and yes we're in what may be the center ring of a focus (not circus); and that's 'antibody therapeutics'. It's hard to believe the Nation didn't appreciate the importance and efficacy, until they sort of flooded the President with a massive 4 gram dose of Regeneron's. It sort of reminds me on the non-denial denials about the whole epidemic early in the year by the incredible money-throwing at just one approach to salvaging the citizenry (Bill Gates and Fauci's vaccine bias or not, as 'both' now suddenly express enthusiasm about antibody therapeutics).
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