Smart evolution, not revolution - is recognized by most Americans as a logical way to reflect on the domestic turmoil, in the midst of pandemic, that surrounds a very conflicted (and politically divided) time in our history. The failure of many to approach, or even endorse, social reconciliation, remains problematic. So we're going into this holiday hoping that many Americans will celebrate our heritage as well as culture; realizing it's a blend of everyone who has come to these shores; with many having made astounding accomplishments that enhance harmony.    

It's a minority that have not (both on the left or even right), who rather than seek inclusion and reform where needed, push harder, in a campaign for destruction, which would not be constructive. And it is in that area where more exploration and humanity needs to prevail; even though some of naive manipulated types do not want dialogue; they want more than egalitarian progress. So beware. Efforts to erase or distort history, aside clarifying where needed, doesn't sound right.  

That even assaults the achievements of lots of people (black, Asian, Latino, gay; and earlier Irish, Italian, Jewish and so on) who studied, worked, struggled and eventually ascended to prominent positions at every level of society or at least benefited from 'upward social mobility'; for which they fought (as the US earlier did have discriminatory phases in each of those realms and more). So it is that 'independence' given the 'right' (not entitlement) to achieve, that we celebrate.  

So on this 'independence' day, I suspect generations of Americans celebrate and understand, even if some are still learning, or worse, are manipulated by those who don't wish harmony; but actually desire division. Certainly the atmosphere is charged by despair among the unemployed (even with some help they struggle, or have no confidence in the future; while many muddling through this do).  

And I know the cynicism of money managers: after all I just learned that the very largest Pension Fund in the Nation lost about $160 Billion (yes, with a 'B' so far this year); that's 'annihilation'; and the guys and gals running it are still there (I'll not delve into their misery as a courtesy). So if you or I ponder what stocks we might have handled a bit better here and there; my gosh; it's nothing like those who were selling into weakness in February, March and even on the way up; to only not chase big-cap stocks (that's all they typically buy) 'after the move'.. just imagine the percentage gains they'd have to achieve to recover just portions.  

It's for sure unclear when we'll see the end of the Covid-19 ordeal; but it's clearer than ever that avoiding the temptation to look for decline, and then not get negative with the mob after it was well-underway, sure paid-off. Simple stability for a fund is a gain this year; compared to the apparent disaster some have suffered.  

Executive Summary:

• The market stamina prevails as targeted, but will soon be 'at-risk'; sustained by periodically running-in shorts, along with bears capitulating to the upside;

• A domestic 'moment of reckoning' will only have backdrop impact on stocks; as markets increasingly will be swayed by the epidemic and related politics; while there is some increased geopolitical risk (China) seeping into all this;

• One member asked me when this will all end; my response was not vague; it was roughly November 5th (kidding on the date); arguably the pace of drug and vaccine testing 'coincidentally' suggests relief around that time; with 3-4 months still of difficult coping with these unprecedented circumstances;

• Overarching influence remains the course of the pandemic; awful so far; with only now the broad-embrace of wearing masks and doing testing; as if tests were an end-goal, which they are not; so CDC should be allowed to run this even though they too misjudged the severity during the early warning days;

• Contradictory 'Covid management' continues, with alternating perspectives; in-reality the CDC's 'muted' comment that there is too much virus to contain, is really the operative situation the Nation's health teams are dealing with;

• Dr. Birx in Tampa Friday suggests USF as an ideal test-bed for 'pool testing; our health director disputes this; believing Covid-19 already too widespread;

• 'Pool' would be (for-instance) testing a school-class of 30 at once; and only if there was a positive case, then test each student individually; a waste of time at this advancing stage of the poorly-handled pandemic;

• Speaking of Florida, Miami-Dade will implement a 10 pm curfew immediately; and other cities will follow; various restrictions are totally covered in media;

• Late breaking Friday night: Chicago will implement quarantine on travelers; and New York is considering reimposing more restrictions; so is California;

• More stories circulate that social-media amusement 'TikTok' is a data-mining tool of the CCP (Chinese Communist Party); use care if your kids sign-up on it on any computer or device used for financial purposes just in-case;

• Facebook will meet with 'civil rights' groups (or a variation) on Tuesday; at the same time advertisers may be in no rush to resume social media ads;

• CDC now forecasts 148,000 US coronavirus deaths by July 25; at a point of this growing exponential, you will essentially have a 'stay-home-situation' yet again; regardless of official policy;

• Shutdown was preferable as I argued back in February when Seattle's first nursing home incident occurred; shut it for 30 days and we'll get thru it; but I suspected the US wouldn't take that route; the US did not; and it's too bad;

• Others also misjudged at the start; paid a price but got it under control quick; and we still need to come to grips; I doubt we'll officially shut-down; meaning meandering through it with 'blended policy', will be a slower process; but the economic duress will 'technically' bias policymakers not to totally shut down, even if effectively we have that now if you look at reticence to travel etc.;

• The stock market will wander past the holiday; try to rally; but with so much new speculation and bears capitulating to the upside; I would keep the S&P on a 'short leash' as this will have an increasingly canine aroma, stay tuned. 

However, the market's resounding comeback (and ongoing stabilization) tends to reflect a complacency that suggests not only that the comeback is legitimate; but more is being made of the domestic 'angst' that merits response by the market. It may be that markets are really expecting a comeback more broadly; or far more likely, it remains on the back of the Fed stimulus, low rates, and sort of ignores a continued crushing of small and mid-sized businesses that only perked-up for a period of time, as more-optimistic exits from lock-downs took place weeks ago.

So there's not much to be gleeful about; except for those who concurred with us, of course protected themselves in late-January / early-February, and reversed to the bullish side of the ledger again, as we got the expected March capitulation.  

Through all this, the overarching determinant remains (all year aside the first two weeks) the Covid-19 situation, and the responses to it, more so than any charts; although they provide a reflection of the activity; and in this case affirmed to us a rather unique view that others generally haven't shared; that stocks overall were not really overbought; as just the limited number of leading 'super-caps' clearly, for months now, were controlling S&P, both on the downside and the upside.

Very recently we have a bit more broadening-out; and twice when this occurred in the past couple months; a temporary shakeout ensured within days. So let us keep that in mind for the phase after the Holiday into mid-July; as it can be rocky even if it's not terribly definitive about what comes after.