E Market Briefing For Monday, Nov. 29

The growling beast threatens to now burst out-of-Africa and subdue global society; which was already hinted at several days ago by emerging reports. In fact the U.K. had suspended arrivals first; and now everyone is following. The story is fluid as developing; but while the market's belated reaction is dramatic in superficial scope; it is not evoking the same responses of Covid's 'dawn'.

The message to the market (and society) is: we don't know enough yet; but at this point politicians aren't going to be asleep at the switch like early last year; nor will (hopefully) big-pharma only focus on mediocre vaccines that can't be widely distributed to disparate (and desperate) populations on a global basis.

Another message was that they nailed overly-bullish Oil traders and pushed a backwardation situation hard (longer options); making it likely this is a purge it seems both justified and insane; probably precedes a washout and rebound if OPEC follows next week with a cancellation of increased production quotas.

All activities Friday were exaggerated, with most traders and money managers disengaged over the holiday weekend; and so you had impulsive reactions as well as a bit of illiquidity as has been sort of evident for a couple weeks now in general; and certainly air-pockets on an abbreviated session like Friday's.

In the market; of course it makes S&P 4700 look toppy; although if any of the solutions look promising; it could actually denote a low-point next before year-end upside finds a footing or starts slow (likely not robust) recovery efforts.

In-sum: the epidemiological data is currently limited; thus premature to grasp the future of this. But it's not 'all bets off' either. Some immunity exists, and all that is more than was present at Covid's start. On the other hand S&P was so high based on a handful of mega-caps focused on total economic resurgence and we're not really there. Risk has exceeded big-cap potential for some time.

If the US retains enough pre-existing immunity from vaccines or having actual Covid; then at least two-thirds of our population is somewhat protected. Well I have to say 'maybe', because it's too soon. We are dealing with preliminary as well as non-peer-reviewed data from South Africa; travel is being closed down from Africa, and that is 'not' a big mistake as some think; but it may be too late already in terms of the transmissibility of this new outbreak and rapid spread.

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This is an excerpt from Gene Inger's Daily Briefing, which typically includes one or two videos as well as more charts and analyses. You can subscribe for  more

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