A 'return to normalcy' - with minimal concerns about radical transformations, especially as relates to fiscal and monetary policy, partially relates to the S&P surge, which was expected to reach the low-to-mid 3600's, but not 3800 yet.

The economy and interest rates matter more than politics, and COVID relates to all of it. Worse fears are removed with Yellen's appointment, more so than any enthusiasm about Yellen herself. I was often not a fan myself years ago, and very much welcomed Fed Chairman Powell. The point is more a 'centrist' one that particularly being a fan of return to 'some' prior policy perspectives.

During Yellen’s prior tenure as Fed Chair, Fed policy uncertainty fueled fairly long-lasting strength of the dollar, and we were consistently Dollar bulls then. The perception must be that you could see a better, shall we say more formal setting, around the Dollar as we go forward next year. Nobody argues higher rates until we are well into the post-COVID recovery phase.

I don't disagree at all with concerns about eventual debt risk being expanded in a Democratic Administration, just that it would be regardless in this backdrop. However at some point money-printing temptations risk becoming addictive to politicians especially, and that's when the risk returns. I have often noted that the favorable growth and firmer credit markets will eventually create a price to be paid, while pointing-out this is on our radar but it's not closing-in 'yet'.

Many payment deferrals are going to collide with this 'happy days' upside run, whether that's sooner or later, and especially if you stimulus doesn't emerge, in this lame-duck Congress. Yes things are getting frothy, and there are many disruptive considerations out there, which aren't being focused on. One of the greater concerns might well turn-out to be resistance to getting the vaccine, if we don't see at least one or two of the newer vaccines with few side effects.

On the vaccine 'spin' . . I noted some reports have changed the expression 'side effects' to just the word 'reaction', so as to seemingly minimize reported post-vaccination disorientation, fever, and pain, that some say lasted a week or so, and caused work absence for a day or two. Depending 'which' vaccines have 'that' reaction, but minimize public willingness to be inoculated, matters.

Yes I seriously contemplate postponing accepting it, even as I presume it will be offered given my age bracket (39+), so will have a chat with physician on that topic. I'm unsure about the 'early' vaccines, I have tended to prefer (still do) 'therapeutic antibodies' as that is, or will be, a way to intervene proactively should symptoms appear (and perhaps do nothing until that possibility arrives, or if one is proven to have say 6-12 months efficacy), perhaps in-lieu of any vaccine, but I cannot firmly say I have a conviction yet about how this works. I do know that big-pharmas limited the type of patients they would enroll in trial participation, although a couple more recently have broadened criteria. Many above a certain age have some co-morbidity or at least high blood pressure or similar, so outcomes (and tolerability) in such groups is rather pertinent.

By the way, not that I'm pleased at all with Sorrento (SRNE) management's optimistic outlooks, and then nothing arrives in the time-frame they estimated, I concur with the idea that 'antiviral / antibody' treatments for many may become what is the preferred way to go 'if' confronted with COVID. Note President Trump got an antibody treatment, not a vaccine. And he's relatively fine (so it seems).

In the case of Sorrento, they 'promise' a low-dose (for-instance) 100 mg shot, versus the 4 grams (twice) that President Trump had of a Regeneron IV (REGN). In my thinking so far, although the market soared on the vaccine news, that's for probably mass protection and the concept of 'happy days are here again' has dominated (more so than Biden, Yellen or any of the rest, but a combination).

I think this weakened stocks like Sorrento, but that might reverse if a) people increasingly accept 'antibody treatments' as the preferable or back-up drug, or b) Sorrento actually succeeds (and we don't know if they will) thus allowing a treatment without hospitalization, or c) the eventual pill or nasal treatment, of course reducing anxiety broadly, even more so than basic drugs or vaccines.

In-essence, it is not that I have a particular fear of COVID (hard to characterize) but realizing even as many still squabble about what's the best approach, or if they'll take the vaccine vs. antibodies (or have both available), the market key remains the idea of bridging the gap of a miserable winter (seems to be lost in the shuffle, and we hope the situation is nowhere near as horrid as most cities and states, and even countries, are reporting rising case levels). The point is: even though mortality levels have thankfully improved, lingering after-affects in most patients, proves COVID recovery is no walk-in-the-park. Best of all: not to get sick in the first place, which is why many of us disengaged a lot. Is that fear, or is that common-sense to minimize interactions until we know more.

Meanwhile . . analysts continue panning AT&T (T), falling-back on earlier stories suggesting an eventual inability to service debt or maintain the dividend (over 7% yield). Just this morning yet-another claimed HBO MAX wouldn't succeed, and lose talent and content. Suppose I suggest that investors consider rather the opposite, as characterized in an ongoing note from AT&T's CFO.

Senior Executive VP and CFO John Stephens, spoke about the momentum in postpaid wireless plans. AT&T was able to reduce churn in the third quarter of 2020 and drive adoption of higher-tier unlimited plans that include HBO Max.

Stephens said combinations of network and user demand for entertainment, would yield long-term value creation across AT&T's customer base. I concur, and note that (after months of negotiations), HBO Max's availability on 'Fire TV', which is Amazon's, and simultaneous release of "Wonder Woman 1984" on HBO and theaters (oh my, I actually had...Linda Carter .. original Wonder Woman .. as a neighbor in LA, way back in the day).

I expected that once production would start resuming (it is), and the Amazon (AMZN) deal got made, things would perk-up. AT&T expects 2020 full-year free cash flow of more than $26 billion. Dwelling deeper into capital allocation, Stephens said AT&T's dividend payout ratio for full-year 2020 will be in the high 50's%.

AT&T refinanced more than $60 billion of debt at historically low rates and has $30 billion debt due through 2025. A combination of higher free cash flow and lower-priced debt gives it the financial strength to invest in high-growth areas of fiber, 5G, and HBO Max. So, for conservative investors in my view, it's fine.

Stephens also said AT&T's integrated fiber strategy will improve connectivity for both consumer and enterprise markets and enhance its 5G network quality in a cost-efficient manner. I personally have AT&T fiber, and it's been great. It is also true that AT&T is generating savings from efficiencies, organizational alignments (Elliott Management put pressure on them), and more. I'm noting all this due to the uninformed negative comments on some TV channels that I seriously disagree with, and believe investors in this area will be fine. (We did not pay up, in fact we were bearish at 40 and bullish sub-30 and still are.)

It matters as AT&T saw traction in the third-quarter in mobility and broadband, and by doing so beat the consensus Bloomberg and others had for it. Another example: Broadband net adds of 158,000 surprised analysts expecting a net add loss of 73,000. Domestic HBO and HBO Max subscribers totaled more than 38M and 57M, exceeding its year-end target of 36 million subscribers. So I stand by my optimism every time 'T' drops down to the 27-28 area.



Also.. time doesn't permit me to write about it now, but one of the founders of ISP Optics, the New York and Latvia firm acquired by LightPath (LPTH) a few years ago, is now taking an important position of Strategic Development at LPTH. That may be while it crept up to the $3 area today and perhaps will do more near-term as well as gives an idea of their expanding plans, even globally.

Bottom-line: the market's 'indecision' pattern in what I call the S&P (SPX)  overshoot zone indeed resolved to the upside. Expect more on Wednesday.