E Market Briefing For Monday, Aug. 31

Politicized trench-warfare promises to become 'even more brutal' as we meander from scripted or choreographed Political Conventions into often erratic and defensive September and October months that can prove challenging to markets; not merely to candidates. This year is clearly a remarkable 'mix' that hasn't been seen before.  

  

   

Of course technology continues dominating markets; especially super-caps, as I term the heaviest-capitalization (thus top-influencer stocks) in the S&P itself. In that sense, the big picture reflects the market marching forward for months now; it seems consistently since we called the March 23rd 'Inger Bottom' max-fear low point. But it's not that basic; since many stocks detached from the rebound off the low that I called an 'automatic rally' (a term from the old Wyckoff School of technical analysis); and really have been shuffling with more narrowness than the leaders that provided a better picture (or illusion depending on viewpoint) for the 'stretched' S&P 500.

 

Executive summary:

  • The average stock has not done nearly as well as the superficial 'snapshot' of the S&P 500; and that's causing some to lose sight of changes in the market and life;
  • While it's broadly seen as a way to keep the S&P firm, its also reflecting a shift in our home, work and school lives, to more of a digital environment; which analysts have embraced as something that's going to be irreversible;
  • Lost in that is the prospect that the tendency to 'involve' workers and students in a corporate or academic culture, likely will result (at least somewhat) in a trend to re-involve people more intimately with their cohorts, as once it's perceived safe;
  • That of course resides on the optimism that we'll get to a point where therapeutic treatments for Covid-19 will be as basic as a prescription at your local pharmacy;
  • At the moment the Abbott antigen test is 'all the rage' and we stand corrected as it is nasal; but not pushed all the way to septum; however since it is for people 'showing symptoms', the idea of administering it before flights etc. makes little sense, since if one has symptoms (Covid or seasonal flu); one shouldn't be out;
  • We continue optimistic that saliva tests will corral this market when available, and I do not mean just Sorrento's; although it should be one of several players;
  • Eventually a prophylactic shot or a series of 'pills' once a test suggests positivity, is going to transform this scourge a 'chronic' rather than 'acute' disease; hence it will relegate worry about contagion (gradually as all this gets deployed) to history albeit not globally all at once; but over the course of 2021-2022;
  • In the meantime we'll continue to see bifurcation in stocks and the labor market, as well as focus stocks; but won't entirely return to pre-pandemic life patterns;
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