E Market Briefing For Wednesday, Oct. 21

A question remains as to whether we get conventional rallying by the S&P with guarded participation elsewhere, and whether or not that's worthy or just a complacent (plus sporadic short-covering) flirting with the highs like a ship of fools headed towards an iceberg in the freezing North Atlantic, and whether or not that will have an immediate response post-Election (if outcome known). So for now keep hatches battened down, while allowing a 'Stimulus' pop.

Executive summary:

  • S&P alternating shuffles related to sensitivity about Stimulus news, at the same time there is (politics aside), a lifting trend related to lock-downs, an exception being California which denies Disneyland (DIS) reopening until there is the lowest-level of community spread according to Disney's CEO.
  • Stimulus wasn't determined by Pelosi & Mnuchin before the Close, but Senator McConnell said he'd bring it to the Floor if they make a 'deal', (a series of contradictory media reports leaves that prospect wavering).
  • DOJ confronts Google (GOOGL) in the biggest challenge of the last decade, so if there's a breakup would parts be worth more than the whole, perhaps.
  • They accuse Google of 'protecting an illegal monopoly', shares dipped and then rallied right back on the news, of course that relates to what in Google is called 'Code Red', which refers to their Apple (AAPL) relationship (in it Google pays Apple to be the 'default search engine', huge revenue).
  • Netflix (NFLX) EPS missed, as far lower subscriber adds, impacts FANG types, also reflects either viewers watching everything offered, plus competing 'over-the-top' streamers like Peacock NBC (CMCSA), HBO Max AT&T (T), Disney (etc.).
  • Netflix will really get worried as we emerge from COVID when others can spend more on 'proper production' as well as the broad return of 'sports', also little noticed, a just-added Apple Music TV, an effort to broaden the scope of Apple TV+ (continuous current top music videos running 24/7).
  • Long-followed Texas Instruments (TXN) beat numbers with better guidance as well, addressing notable demand in 'automotive' sectors (indirectly relates to sensor-monitoring and controls, autonomous or otherwise, our interest in vehicular electronics persists as these transformative trends evolve.
  • Snap (SNAP) beat numbers too, and a tiny profit, but I don't know why surprised in this environment with kids using such Apps consistently, guidance then shifted to calling for strong growth ahead (or will emergence from COVID in a sense tame online use as the coming year unfolds?), not as of yet.
  • I wouldn't be surprised if the behavior of social media stocks, during the 'wake' of divisive environments, changes in 2021, sort of the designation of social media giants as publishers (by regulators) in some cases.
  • This would be some effort to reign-in their supplanting once omnipresent mainstream media, that itself became too-agenda driven, in what became a very free-wheeling environment.
  • Politicians won't succeed in suppressing free speech, and there are risks with self-righteous 'woke' attitudes as well, at this point, the best part of all this may be Americans seeing this for the civics lesson that it became.
  • And that's the rights of free expression, while sometimes the outrageous fake news or conspiracies conflict with censorship all both (confounding), as journalism generally struggles to return to its roots (Edward R. Murrow wouldn't give many awards to this era's crop of on-air 'personalities').
  • The run-up in 'solar stocks' may be almost as volatile over time as we've seen in COVID plays, although they are sending a message related to the Election, as obviously Trump is not enthused about solar, while Biden is.
  • However we're following S&P (SPX) primarily and not trying to 'game the vote' for the budding industries that might benefit under Biden (Solar & .. Pot).
  • Speaking of 'budding' the polls seemed stoned as they roll, generally lean more toward a 'Blue Wave', though now narrowing, as you'll recall what happened in 2016, this isn't over until the Fat Lady sings, is it taxes?.
  • By the way it's hard to believe arguments that COVID is retreating, when it is only today that the governments of New York, Pennsylvania and even New Jersey, are discouraging travel between them to 'limit the spread'.
  • And today Ireland went back into 'full lock-down', that's an economic as well as health crisis, and has nothing to do with American politics, I wish more leaders and our media would ponder this sober reality.
  • As to emergence, perhaps Comcast and Amazon (AMZN) sends the message, both told working-from-home staff to expect doing so until June 2021.
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