Market Briefing For Wednesday, July 22
Naysayers mantra - for fighting this market, began with 'fighting the Fed' (they still continue to do so). The bearish arguments continued with arguments about Debt collapse (out there way in the future, and we are concerned about that too, but not for current market strategy), or they'll focus on the charts and proclaim an extreme overbought condition (without noting the rotation we've consistently focused-on, and is the heart of keeping this extend move alive). Nevertheless, while rotation holds up it achieves the stabilization of 'trend', but it also can come as things get skittish.
And while a lot of that has made sense (we've touched on all the concerns, but didn't short this market, and are still holding the majority of positions, not merely biotech's, which have in some cases been mixed, and in others nicely higher so far)..while lots makes sense, the idea has been 'follow the money' and recognize how this works at the same time we're very open-minded to the ever-elusive shakeout looming.
Executive summary:
- S&P so far continues to 'prove' my contention the March low ('The Inger Bottom') as I humbly projected that March 23rd day, holds; and sure, we'll get corrections or shakeouts; but so far the lower yields in bonds and higher stocks continues.
- Gold hit a multiyear high too, and we've been bullish, whether it's a play on low or negative interest rates, or geopolitical or even social chaos, but as a triple over 9 years or so, I'd say it's a hold against a worst-case, but not a bargain.
- Nasdaq and the Nasdaq 100 are of course the most extended, but broadening the participation and/or the 'rotation' I've felt essential, keeps this alive for now.
- There are still differences between Capitol Hill and the White House (of course) for the next 'relief' bill, but highly probable that we'll get it.
- It may be insane, though Senator Rand Paul, who opposed every round of COVID-19 related legislation, should realize there's 1.8 trillion out there, and why would anyone think they won't put that to work for the economy (and election).
- It's too soon to get into the weeds about a 'contested Election' or conspiracies (and I'd rather not at all, given I consider myself centrist and think it nuts when so many educated individuals join riff & raff on either the right or left extremes).
- I note that Twitter just deleted about 7000 Q-anon accounts; and restricted 150,000 others, probably after the fairly clear explanation about them provided by CNN's Fareed Zakaria, last night.
- In many swing states things could radically shift prospects, and there is a real risk that a disingenuous effort at contesting votes could throw the country 'off'.
- What can throw the country 'on' would be a COVID-19 PILL such as Sorrento (SRNE) is testing, with Phase 2 FDA approval (I think that's for the pill not the IV drug), and that was my focus last night with regard to the moderately longer-term', and I'm probably mixing-up the modality of their 'candidates' but it all seems favorable.
- Sorrento's key product to move the stock near-term is on-site 'rapid testing'.
- The geopolitical friction might back-off from the perceived 'cold war' with China, and I used lower-case on purpose, because I think aside supply-chain shifts and data issues (where there definitely is and will be a realignment) will be just fine at the same time the United States will reaffirm support for Taiwan.
- The U.S. carrier strike groups are operating with India's Navy at the moment.
- Strength and resolve toward fair-dealing (not hostility) with China should be bipartisan in nature, and that includes offering asylum to Hong Kong residents who wish it (I even suspect that's what the UK's PM Johnson and Sec'y. Pompeo are sorting out right now in London).
- Stock market behavior should struggle onward for now; maybe tech again takes the fore again in tomorrow's trade, as this sort of 'Coney Island Cyclone' roller-coaster ride persists.
Meanwhile . . we already know COVID-19 will be around for a long time, or the virus will be anyway, which is also the case of many we don't worry about, because we're well vaccinated, or have treatments, in the case of those that are chronic diseases. The President's comment that that COVID-19 will go away 'eventually' will be correct as far as daily life is concerned, but not the SARS-Cov-2 virus itself.