An overvalued market has now prevailed for some time, just via a cursory glance at S&P, or certainly the tech-heavy Nasdaq and NDX in-particular. Growth trends are slow, though they look better 'relative' to where the economy has recently been. And it's not just the U.S., given dovish monetary policies globally, and rising stocks overseas too. Will others start barring short-selling (which ultimately contributes to a series of rebounds, though isn't generally view thusly these days, given how it's used for reasons other than originally viewed .. but frankly if not for the shorts on Tesla (TSLA) or Apple (AAPL) from time-to-time, it would have been harder to arrest fast shakeouts).    

That's part of why both the Fed and a majority of corporate CEO's are concerned (and the latter via a survey) about prospects ahead. Of course a rapid emergence from Covid-19 conditions would change everything, and put 'valuation' in a different perspective, but we're not there yet. And that makes it tough when saying the Fed's policy is 'favorable'. So I think the Fed would back-off if they see real ebullience.   

 Executive summary:  

• The Fed is addressing not just dysfunction in markets, but covering the incredible debt situation by focusing on (mostly neglected) 'main street' lending programs.

• Many companies that did not get funding in the first-rounds, need money and in a sense were back-burner considerations (higher credit-risk assessment) early on.

• In my view those were companies that needed priority, not how it was handled.

• The Trump Administration commitment to buy 150 million Abbott (ABT) 'nasal swab' 15 minute tests is fine, even though it requires testing by a trained person as FDA approved the EUA, even if those restrictions suddenly vanished (it's an 'antigen' test, which are more notorious for false negatives, but that's being ignored). 

• Sure, the Abbott test (and others) will be competitors to what Sorrento (SRNE) will likely unveil more about soon (reports suggests the formal application will be late next week but that's unconfirmed), in that they waited until it could be submitted along with Covi-track (the mobile-App aspect), I suspect.

• Once again, the saliva test will likely be broadly-embraced (others too), but that's not the core of what Sorrento has been working on, which is more accurate tests and of course the core 'solution' prematurely (or inadvertently) called a 'cure'.

• By the way they listed the STI-5656 Phase 2 Trial on Clinicaltrials.gov tonight, so while it's not recruiting (I think that's the cocktail solution), they say 400 people.

• Once more, Sorrento is not a stock for most investors or traders, it needs more than a bit of patience and as I'm reminded what I said when it was in the 'teens, if it makes you nervous holding either sell or sell-half and play with house money.

• I'm aware many have it both up and down, are still ahead, but Covid stocks are indeed like trapeze artists in a circus, and some may or may not be performing with safety-nets underneath.

• Skeptical of the initial hype, I hence didn't suggest any buy until a later drop into the high 3's and low 4's (and later around 6), never higher levels, or just fiddling with options as a less risky approach in a wild Covid 'minefield', which I still term the entire surroundings of a ton of Covid plays to be.

• Speaking of, tonight ends the quiet-period associated with the SmartPharm deal as I understand it, and if so Sorrento will be free to respond to many questions, if they desire, certainly many investors would like to hear lots of clarifications.

• The overall market is sort of high-level neutral at the moment, with 'super-caps' having trouble extending their moves, and having sharp but brief sell-offs. 

In-sum: the circus continues under a 'big top', but it doesn't have to be a lasting one. And that is the rub as there's a rush toward optimism, which is hardly justified when one looks at the minimized reasons for testing, and then proclamations of new tests that aren't particularly comfortable (nasal) nor advised unless one has symptoms. (I noted the major networks are having trouble trying to assess the CDC's revision. It's nuts, smells of political influences, and as for the 'backlog' of tests, sure, moving to a color-coded easy system helps, but that's not a reason to question testing wisdom.) 

Of course that latter aspect will be thrown-out for the moment, as Abbott's is being hailed as a game-changer. Yes it's a plus, yes it's inclined to yield false negatives, and the limitations on this particular test or the reduced testing regiment itself, seems to be a recipe for community spread of Covid. You need pre-symptomatic testing.

Actually Chairman Powell himself alluded to the idea of being trapped in a monetary policy that's extraordinarily dovish for too long as they push for rising inflation (just a personal take on it), and my view that promoting inflation allows repaying debt with a depreciated currency, but also plays havoc on Americans living on fixed incomes for sure (and he must know that), and sets-up a potential major debacle for markets. (In the long-run it will increase the prospect for a credit bear market, and equity crash in the future, but that's ahead not immediately to be reckoned with.)  

The Fed's mandate is 'price stability'. Reversing policy as Chairman Powell stated, is an emergency approach because of the debt we've built. So you intentionally risk an overshoot of dovish policies, while assuring the public that you're on-guard for rising inflation to the point of building risk. Anyway that's how he presented it.   

I'm not sure I concur with that, although it may continue to assist markets for awhile. I compare it to players in the 'super-cap' stocks, some of which spiked this week, and had at least temporary selling squalls today after the brief rallies on Powell's talk. It's akin to 'dancing to the music, thinking you can get off the dance floor quickly when the music stops, before the crowd decides to exit the dance floor'. The presumption is that most of the crowd thinks it's a pause before more music, and not last dance, even if this circus is taking place in the center ring under what may be a 'big top'.   

I actually don't think today was last dance, though valuation-wise it should have been for some of the most overpriced stocks. PE's are high, but somewhat influenced by a dearth of earnings in so many run-of-the-mine stocks, so it's not a serious measure, in the overall S&P, while it sure is if you narrow that down to the leading super-caps.