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;

• That means that even though serious corrections will likely occur; technology and associated stocks that benefited during this 'life-changing' experience, will not entirely be reduced in prominence; but upside stretches will be less rapid;

• On the Covid front; we believed that 'pressure' somehow distorted the FDA's warnings about the limits of benefits from convalescent plasma treatment;

• On Friday FDA Commissioner, Dr. Stephen Hahn, removed Emily Miller from her role as Chief Spokesman for the FDA (installed at White House insistence just 11 days earlier); a day earlier he fired the PR consultant Wayne Pines, who advised the Commissioner on how to characterize the exaggerated plasma efficacy;

• We wish that any patient have encouragement and 'hope' for early treatments; at the same time the credibility of the FDA requires not doing 'flippant' approvals;

• Granting an EUA is helpful to breakthrough red-tape that dogged FDA for years; while (like with politics), going from one extreme to the other often isn't wise;

• Compassionate use FDA policies; and expedited (fast-track) evaluation is very much desired; but not language that distorts best practices (such as the CDC's walked-back revised recommendations on testing; as was roundly disputed);

• We hear that both Moderna and Pfizer are having trouble with vaccines since they have to be transported and consistently maintained at sub-zero temps; it is one thing to get that to work in the lab; another if it's to be widely distributed; I hope they're able to sort stabilized ways to transport and deliver vaccines;

• In the meantime, data from Moderna's first vaccine trial was 'sub-optimal' and some say massaged to minimize the reactions (we cannot confirm); however it is a key argument of anti-vaxers like Robert F. Kennedy Jr., and is perhaps part of what President Trump refers to by 'something going on' to hold things up;

• Documents obtained by Axios & Public Citizen suggested NIH owns half the patents for Moderna's vaccine so could collect royalties; additionally, scientists filed provisional patent applications as co-inventors. NIH regulations let agency scientists collect up to $150,000. annually in royalties from vaccines;

• All of this is controversial (part of the 'Covid minefield' as I call it); as would be any inference of bias / favoritism toward any pharma (better vaccine or not);

• Let's add to the potential candidates for OWS awards Vaxart & Inovio (an oral vaccine 'pill' for VXRT and DNA-based for INO); we have mentioned but have not bought either, nor have we delved into the mechanisms of action; but they could all be part of a 'sprinkling' for gamblers (note that such stocks generally are not multi-solution candidates, which of course was the appeal of Sorrento if just one of their many approaches works.. may none will; perhaps several);

• Apologies for equity discussion complexity, but it's what's going on in crisis-driven market now; believe me I'd rather just reflect on the S&P, the Fed and bonds, but Covid solutions is where it's at; with big market moves to be focused on when the market seems to be shifting again; which we focus on daily; but not there as yet; so the admonition to 'not fight the Fed' and recognize bifurcation, still prevails; so back to Covid, and another story that gets more interesting in the week ahead;

• Heat Biologics, boring for awhile and below sub-2 entry price, may be awarded a US Patent on vectors that enhance T-Cell activation in a vaccine; this could be a fairly broad coverage which, if awarded as stated, elicits favorable collaboration and distinct from their favorable cancer studies with Bristol Myers Optivo;

• A number of experts do mention T-Cell memories being longer than antibodies; hence longer protection or efficacy; lots of testing remains; but maybe 'Heat' will find sponsors beyond a Covid-related trial I noted at the University of Miami;

• (I'd speculated 'Heat' could complement Moderna's mediocre vaccine, trialed at UM also; but absolutely haven't heard a world about it); now heard Bristol Myers drug possibly being assisted by Heat's T-Cell vaccine fighting cancer; but nobody clarifies the nature of their relationship beyond a combination cancer trial;

• We merely heard 'Heat' sought funding; needed a partner; and nothing on that as yet; in the wake of the Patent announced quietly weeks ago; likely imminent;

• So, given a Patent coming, perhaps we see perception of broader applications to numerous diseases; even a revolution in prophylactic vaccines 'if' it can be shown elevating T8 & T4 cells can safely be done (that would possibly cure HIV and most viruses in-theory); 'if so' that's absolutely next-generation medicine beyond Covid; again emphasis on 'if' so (hence we'll elevate HTBX a bit and suspect get back to our entry price of 1.95 or perhaps lots more is feasible);

• Whew... departing the NIH and medical swamp; we'll note resignation of Japan's PM Abe may not impact their monetary policies; which have been a poster-child for problems with overly-extended dovish policies;

• Global hotspots persist; I'll touch on this; while Peru now surpasses Belgium as the proportionate world's hottest spot for risk of catching Covid-19; and today we sadly hear of new outbreaks and cases mostly in the young; in France, Italy and Spain (which was hit the most; controlled well, but reopened too aggressively); 

• Viability questions about economic resumption of course persist; so any buying of airlines or other companies presumed benefiting from return to 'normalcy' are risky; though 'eventually' may show recent patterns to be 'basing' as noted;

• There are still risks of defaults and bankruptcies ahead; although less so in Oil with prices reasonably firm; which is a contributor to banks' stability lately;

• Meanwhile too much optimism about the Fed 'paving a new low-rate era'; when in-reality they speak sort of from desperation (lots of furloughs and worse ahead if we don't get big funding soon); so sure, as we do recover, inflation likely will concern the Fed more than they acknowledge in their 'overshoot' objectives (I know: we have to deal with both a social calamity as well as focus on revival);

• So many companies reduced overhead; that 'operating leverage' will help techs and other stocks next year; on the presumed revenue buildup later in 2021;

• This continues our case for continued erratic behavior (rotating on news too); but not catastrophe, even if you get a shakeout of juggernauts along the way;

• Asset bubbles; inflation delayed response; lower unemployment and more; are all sort of shoot-first (expansive policies) and worry about inflation later-on.

Meanwhile. . . the pandemic continues; and isn't as diminished as we'd all wish. In the U.S., the desire to be cavalier and less responsible (avoiding mask-wearing as a for-instance), especially looking at the schools, suggests we need to maintain some semblance of discipline; and not be lulled into complacency by 'rapid tests' or more optimistic prospects on the vaccine or therapeutic fronts.

For instance, this week infections rose further across Europe. Both Italy and Spain reported the most cases since their spring peaks. German Chancellor Angela Merkel warned that the situation will get tougher as the summer ends in September. Britain cautioned against breaking quarantine rules, amid criticism enforcement got lax.

In-sum: the focus remains on Washington for stimulus; and for approval of tests and drugs that do the best for 'people', without undue influence on regulatory agencies at the same time realizing for years there was a slow-walk tendency over at FDA (that was a result originally from the 'thalidomide tragedy' if you remember the ordeal). I hasten to add I may confuse drugs, conditions, or methods of actions; and can't thus assure anything, as I am not a biotech specialist; and don't play one on TV.

If you have a further interest please do due diligence before considering any sort of investment, which is something we believe any investor should do; perhaps even in this era of instant gratification desires promulgated amid the pandemic (to a degree because of it, as suddenly lots of speculators emerge during quasi-quarantine).