—”Double Dip–High Covid-19 infection rates and fresh restrictions imposed by governments have taken their toll on economic activity over recent months” (WSJ -1/22/21)

—“.CNBC: Fauci: New data shows Covid vaccines  may be less effective against some new strains”

“It’s deja vu all over again” — Yogi Berra

What’s old is new again

Last week the market went retrograde, back to the old play book where ‘big tech’ reigned supreme and ‘old economy’ and ‘restart plays’ were tossed in the dumpster and it is all about the headlines above. Last week’s issue of Barron’s tells us all about it: “Big Tech Stocks Are Back. What’s Behind the Nasdaq’s 4% Rally.” I guess we should not be surprised. The media and pundits continue their time-honored tradition of sawing sawdust. On top of this headline-sniffing computers are constantly on the lookout for bad or good news items on which to launch a barrage of BUY or SELL orders. Certainly these headlines are not lost on nervous individuals and institutional investors with biases and itchy trigger fingers of their own.

The New Flight-To-Safety Trade

Since the 10-year US Treasury note is only paying a little over one percent and gold isn’t doing that well, the new “safe” trade appears to be back to what appears to be the highly valued tech sector. Essentially they are trading on yesterday’s news.

Dark days ahead … Not so fast

Remember, we were warned about the potential for a third wave of the virus coming in the fall. It happened as people moved inside and the holiday season was upon us. Thanksgiving was a ‘super spreader’ event. It seems like people got religion by Christmas … more masking, more social-distancing and smaller gatherings. There is strong evidence of this showing up in the data. It seems that peak daily Covid-19 cases on this run up the mountain were registered January 8, 2021–309,000. By January 22, the number had dropped to 143,000. Layer on top of this the vaccine rollout, as slow as it has been, is happening.

My read: better days are ahead

Don’t let the media or the computers scare you out of your stocks! 

What’s your read?