Market Briefing For Tuesday, August 4
Stimulus bill delays didn't inhibit the Senior Indexes retaining their gains, while for sure it inhibits millions of Americans who will cease lots of consumer spending as the indirect subsidies are forestalled. Many Americans, sadly, are really struggling now.
So it's no surprise the 'eviction' issue will be forestalled, Congress (dickering long) of course do more, but we are at an economic health-related inflection point, which may be why the President continues to soft-pedal the situation, and even spoke unkindly for a moment of Dr. Brix, and hopefully they 'air-hug' and make-up tomorrow.
Really I have to rush this report (I'm often late when I'm trying to dig up information, in this case it's about Sorrento Technologies), as the FDA assigned their original test a registration number, but that's not formal approval, even if media pundits say so. I think they'll have that soon enough, but so far that's still pending even if the stock is roaring forward. It traded millions of shares in the aftermarket and the final bid was 10.39 or so. If it opens above that fine, and if there's no immediate new it might settle back, as often occurs, but then rise to higher levels later, whether or not the formal approval is received from the FDA, if that's even at that point just because of a formality put into the FDA database. Stay tuned not eager to sell overall. (The methodology of a test pending approval or denial now, is shared in a later graph.) (SRNE)
Sure, politicians will come to some agreement, but while the amounts aren't known, at this points it's merely the delay that denotes more suffering on the part of the people. That they have insufficient reserves (people often living above their means, rather than comfortably at or even below) is another story.
Executive summary:
- The S&P persists at high levels as we expected, while recognizing that risk sure exceeds potential, but it's not skewed to levels some thing, because profitability and focus during pandemic happens to help several of the biggest-cap members of the S&P, which are also sometimes in the price-weighted Dow Industrials too.
- That today's delay of a 'deal' in Washington did not impact the market reflects in fact this environment, during which most non-super-cap stocks internally already corrected or are fairly mundane, hence not putting pressure on the Averages.
- Microsoft (MSFT) being able to buy (in-theory) part (although all would be preferred) of TikTok, is a highly unusual deal, which doesn't leave Microsoft more exposed as some think, because they already are (their search engine is tops in China).
- On the treatment front, Lilly (LLY)is starting a key monoclonal antibody test in nursing homes, and the competition is welcomed on all these areas where numberous if competitive pharmaceutical and biotech firms are active; just like antibiotics or even the seasonal-flu vaccine; there will be more than one 'winner' in all areas;
- Speaking of, it appears Sorrento Therapeutics 8-minute CovidTrack test has received first a registration number, and then the product name in relevant FDA postings; this isn't 'approval' per se, but I believe should most likely precede the granting of the EUA (Emergency Use Authorization) as may be announced in the very near future (they probably want visible progress before their earnings report that won't impress anyone because they've not revenue from all this as of yet).
- This is not a longer 30-minute Columbia Univ. test recently announced, and is the original filing previously by Sorrento, the 30-minute test is called CovidTrace.
- LightPath (LPTH) remains firm ahead of possible preliminary Q2 data within days, and it is attracting interested presumably based on forward vision for applications well beyond the COVID-19 era, though that helps.
- We think more people become aware of Augmented Reality, Artificial Intelligence, Autonomous Driving, and Lidar, over time, all have numerous applications from manufacturing to transportation, to military, to medical, to space, to consumer products, and the near-instant shift to a digital economy accelerated by COVID-19, helps these technologies mature faster than otherwise would be the case.
- Markets are presuming fiscal stimulus is forthcoming, equities have consolidated and even corrected in essentially a sideways S&P environment, so while 'risk' is of course noted; pressing the market higher (or at least holding) isn't impossible.
- Many companies are throwing-off growth in data, in computing, in infrared, and in biotech of course, many of which are speculative, but that's what makes markets exciting, especially with the super-caps don't offer the potential once held.
In-sum: 'If' we have a rocket-ship with Sorrento, I will suggest ways to stay long and at the same time essentially 'insure' at least one's investment (presuming entry near the original selection level, which was 4, which additional entry for new members at 6 or so; based on my idea that the second retreat would stabilize near there as it did).