Markets absorbed the White House chaos surprisingly well; but we're only now in the first phase of the President's experience with Covid-19. He now is reportedly over a fever; and doing well. However the 'timeline' in getting to this point is being debated; as well as 'when' the President knew not only that he was positive; but had symptoms that could have negated several public appearances (that made him a super-spreader 'if' everyone around him was tested and negative, masks off; while he or staff mislead attendees at a luncheon or so on). We'll let the media debate the relevance.

Conceivably he was unknowingly a carrier while asymptomatic at the Debate (farce); although media barbs about that are likely inappropriate. Let's try to avoid the political side of this; although it matters to markets in several ways; depending on public polls, or other indications if the President's condition (now shared by numerous staff with no choice at the White House, as they simply work there), really reflects Covid's spread to those in Rose Garden events; hence around DC; where politicians of both parties to a degree felt invincible (they must if it's only today Speaker Pelosi says 'maybe we need a Covid-test system in Congress...). I've noted need for 'antibody' therapeutics.

If he does not show an improvement on Regeneron's 'experimental' (in current tests which a 'compassionate use exemption') antibody therapy over about 4-6 days, the concern will be that the antiviral load hasn't been sufficiently reduced, and there's a problem. Risks moving the President to respiratory problems would be a worry, and I think that's most likely why they did move him to Walter Reed.

Fri. morning HHS Secretary Azar mentioned an EUA within a few weeks for drugs of this type; and that would imply knowledge that everybody dealing with Covid will soon be putting pressure on doctors to provide them such treatment options as well. (That's totally understandable, and I presume Azar knows that when you can't have more of a high-profile 'observational' test subject than the President of the United States.)

During the morning I mentioned Chief of Staff Meadows (who tested negative) talked about Covid advances; and emphasized 'antibody therapeutics' and then lowered his voice to also mention 'vaccines and such'. I draw from this what I contended all along; that vaccines will generally be useful; but not sufficiently protective; especially if one believes they may have recently been exposed to Covid. (Vaccines typically take one to two weeks before providing any immunity; 'if' they are even moderately effective).

I take this an an endorsement of 'antibody therapy' and we'll have to see which of the antibody treatments or antibody cocktails proves most effective over time. This one as you know, is from Regeneron, and has been shown 'helpful' but with mixed responses in early symptomatic patients. We're unaware if it's been tested in hospitalized (sicker patients) as yet. One differential with Sorrento's similar product(s) ..and I say products since Sorrento is presently developing three different variations (at least).. with 'one of them', which is STI-1499, now recruiting patients at Temple University in Philadelphia.

There is a possibility that its already been tested in humans this week; but no reports. A source suggests that the actual infusions began before the ClinicalTrials website in this case was updated; but we can't affirm that or what may be going-on in Brazil. Just as with antibiotics for bacterial infections, or different antivirals for other viral diseases, the 'market' for these products will be enormous and it's hard to say which drugs will, of course, be proven from drugs and therapies that work better later versus early in a disease course. The EUA for another drug, Remdesivir, requires hospitalization; so it is interesting if they are taking Trump to Walter Reed to experiment with that one too. I mention that because Remdesivir has not been tested in early-stage patients as well as with 'sicker' patients; and maybe it's synergistic with the antibody drug.

Of course we don't know nor do we believe they would dare yet use the Sorrento drug because there is no human data at all; even if it proves to be more effective. The next version of the Sorrento drug is STI-2020. It's claimed to be more potent on a low dose and definitely pre-clinical for now. So sure, if the President responds well on this drug from Regeneron that gives them a first-mover advantage over Lilly (more issues seen in the early trials) and Sorrento; which has no reported ST-1499 clinical data as yet. If it is successful, from an investment perspective, Sorrento has more leverage as a $10 stock; whereas Regeneron is already an over-$500 stock. (If not, Sorrento has others in the wings and that's where SRNE stands with Covid; lots of candidates but nothing approved yet; with two of the products pending FDA EUA approval as far as we know at this point. We do believe they're poised for more news on progress anytime.)

Market risk remains non-inconsequential; while prospects for a catastrophic plunge at this point are more fanatic Bears; frustrated Credit Market watchers (or tend to be on the permabear side of things); or those who believe some sort of societal collapse is upon us; whereas I suspect it's not that dire for those mature enough to dispel lots of the noise. At the same time I understand the concerns and avoid complacency, which tends to be good advice in most Octobers, which is typically 'off-season' for investing, even in the best of times.

There is no change in the overall neutrality for the S&P just at the moment; realizing that hourly action hinges more on a Stimulus Bill or health of the President (or both); more so than any of the other constant squabbling out there. Technical analysis is at a sort-of-neutral level (notice the Oscillators) while breadth was never so strong over the past two months to justify the idea of a market on edge of a precipice. Actually, to the contrary the chances for a Covid-cure (to emerge from the Covid-Stew) would be something that lifts the spirits of everyone, small business too; and the markets.

So of course we recognize the defensive nature in October ahead of Elections; focus on a handful of stocks that might benefit both during and after Covid; and realize as is pretty apparent, that once the headline in the distance is 'not' an oncoming freight; but a true light 'at the end of the tunnel vision' around Covid, markets may even rejoice. In that regard I continue aware of tremendous near-term uncertainty; with 'Roaring 20's' as a vision once the world, not just the USA, gets through this unprecedented time.

Enjoy the rest of the weekend; with prayers for everyone in Washington and for that matter elsewhere, where too many were apparently too cavalier about Covid-19. I've slipped a couple times personally; but just forgot proximity to others at time. Certainly that's where wearing a mask provides sort of a last defense barrier, if exposure just by being near someone carrying the virus occurred. As I'm fine, and the same for most, we'll (hopefully) never know if we were nearly exposed; so we simply carry-on for now in hopes that we and really everyone, does not get sick; but soon enough knowing 'if' one does that the newer drugs (like 'antibody therapeutics') will become available. It's a reason I believe that once we have that 'confidence' in effective treatments, life and most of what we want, opens up and returns very quickly. Most of the world is going through the same situation; with grumbling, but nothing like our domestic politics.