E Market Briefing For Thursday, May 20

Many years of expansive monetary policies lie behind a stretched S&P in the views of many analysts. They are correct about the Fed underpinning most of this, while often omitting the reality that last year's targeted washout and turn to the upside (in March of 2020) was a totally new cycle, at least in our view.

Of course that cycle can be impacted not just by consolidations (streaming is just one sector engaged in that), but by realizations of excessive multiples as well as 'for instance' a Fed that increasingly chats about 'tapering' policies that allowed all this attraction to equities to develop.

Today Citi (C) issued the newest 'Citi Economic Surprise Index', and it's neutral in terms of overall action. In our view we have an economic blip as the broad economy tries to catch-up to pre-pandemic levels, while we dispute optimism that unfortunately pretends COVID has gone away 'globally'. It's that aspect so worrisome still, as there are upticks in cases in many parts of the world.

If we are extremely lucky that won't happen in the USA, however commerce is so global that you can't dismiss what happens abroad. A great example sadly is the pharma companies talking about possible 'booster' shots. I've probably mentioned this before, but what they are really admitting is that their existing vaccines were based on controlling the 'Italian mutation', which was a version of the Chinese virus that overtook New York City after Milan's Fashion Week.

Vaccinate, Coronavirus, Corona Virus

Pixabay

That's the same virus that dominated Europe and even went back to China. It matters because most experts (not the ones typically on TV) believe not only that the virus came from the Wuhan Lab, but that what will be coming will be a new round of vaccines, not really just a 'booster'. And better lower-dose-levels for monoclonal antibodies, which kills the COVID-19 virus, rather than prompts an immune system response in the conventional fashion. The term booster is a like way of mitigating a broad understanding that everyone vaccinated likely will go through the entire process again, absent real 'herd immunity'.

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William K. 3 weeks ago Member's comment

Interesting, isn't it, that while the cause of the spread was known and obvious, the fools in charge did not do the one thing that could have stopped the spread, which would have been to close the borders TIGHT immediately. That might involve parking tanks on the runways to stop planes from landing, with ample warning given before they would even plan to take off. It might also require quarantine of a few cruise ships for a while. Certainly it would have had some economic impact, but far less than the total lockdown. that we had instead.