Alternating behavior to kick-off the new year was expected, but really was a bit calmer than it might have been, and the upside generally held traction as the day evolved. Comparatively uneventful considering the COVID chaos.

Pixabay

Certainly Apple and Tesla were essential to lead the S&P to another record high as we start the year. Apple became the world's first 3 trillion dollar stock by virtue of today's gain. The day was iffy and it was the push from these two that gave enough headroom for the rest of the market to gain some energy (AAPL, TSLA).

Executive summary:

First let's focus on COVID (remains the economic and market key):

• At press-time we learned of a new variant from Africa, in France now, it has been looked-at, but not yet accepted as 'of concern', by the WHO.

• The desperation to push boosts for Omicron gets questionable, since several studies, starting with South Africa, disputing standard COVID lines about vaccinations protecting against Omicron, it helps but inadequate.

• Aside from a few weeks of moderate protection at the peak of antibodies from a second or third dose, studies from several countries are disdained by authorities, as they show vaccines nearly useless against Omicron as an infection, even as for sure it helps against advanced hospitalization.

• However vaccines are pushed because of the same argument we've had for almost 2 years, vs. pressing forward more urgently on testing and on treatments, with vaccines not at the forefront, 'until' you have a vaccine that's truly 'broad spectrum' (an ability to protect against a portion of virus common to all variants, or more reliance on pills that do that).

• We're not there yet with vaccines, hence monoclonal antibodies and pills are essential both as backup (for breakthrough cases) and even for those who vehemently resist or refuse the initial vaccines (to save their lives).

• Longer-term this exponentially spreading Omicron tsunami likely means there's a 'bat virus' protein being inserted into the human genome, that's not comforting for those concerned about the future of the human race.

• The long-COVID situation also prevails, and while bedeviling physicians, it is probably a reflection of what we first heard from my own doctor while I was sick (and fortunately didn't lose taste or smell), that those who do are at risk of 'loss of gray matter', hence brain tissue, as it doesn't recover, so affected patients may have to have deal with long-term 'adjustments'.

On the market:

• The Fed on the move is at the forefront of investor concerns, however it's COVID that will determine whether the economy will 'really' have the 'wind at its back' going forward, or rather when the faint breeze gets real windy.

• While society is morally immune to being 'COVID-triggered', the market as well as the economy are still cocked and ready to go forward, 'if' appetites for growth returns, as it did for awhile (premature optimism) last year.

• So it's a form of a 'wall of worry' about COVID 'and' the Fed, and that's not something that can't be ameliorated by investors simply wanting an easier task of assessing the market or sectors, Semiconductor rebound is one example of how that can be reflected by markets within multiple sectors.

• They can focus accordingly, realizing areas like Oil can remain firm at the same time not 'moonshots' again, barring physical conflict among nations, while stocks like favorite for 3 years, AMD, or even Qualcomm, do well (AMD, QCOM).

• Yes, geopolitical risk is maintained, as the pandemic has leaders thinking not only in nationalistic ways, but perhaps making mistakes otherwise not occurring (we did that with the Afghan withdrawal, Russia is on the edge of that with Ukraine, and an arrogant China worried about local slowing is pressing the limits of threatening Taiwan short of invasion, so far).

• China needs to know that their economy requires the American market of course, and our consumers sort of 'demand' it, but also the U.S. requires China not accelerate Treasury sales, so there are mutual interests.

• An outlier will be a moonshot on the 10-year Treasuries (well over 2% for instance), but for now that's not happening, with stocks absorbing firming.

• Economic enthusiasm is tempered by not stimulating dramatic interest in a slew of new technologies, which almost moving CES to virtual this year is a hint of, we'll share a few tidbits from virtual CES over the week.

• There are still numerous exhibits (often without people!) in Las Vegas, but most declined invitations to attend CES or Showstoppers (including me).

• Several more exhibitors and even media coverage journalists, pulled-out in the last minute even while physical exhibits remain, but without product managers or executives to explain or sell (sorry for lower-level personnel compelled to be present in an obviously-global super-spreader event).

• Mostly CES transitioned to not just TV's, but away from computers and to autos, there are lots of EV's about to be premiered at CES, even though it appears the executives to display and explain their plans will be absent (I will try to highlight a few of what they introduce or talk-up at the Show, but most are already known and we have discussed to some extent).

• Market action begins the year with chop giving-way to record S&P highs, and does not suggest a topping pattern unfolding, at least not just yet.

In-sum: 

There are many technology stocks that will do well this year, whether or not that business' recurring revenue (Apple or Adobe (ADBE) are great examples, so is Qualcomm) reflects itself in stable or higher share prices. Most of these have already done buybacks and seen significant insider sales last year.

A recovery in Semiconductors would benefit Cloud sectors (Microsoft (MSFT) really is part of that), and most of Nasdaq smaller techs were under their 200 DMA for sometime, hence there is room for rebounds, but not long-cycle rallies. It's a year to talk more about smaller stocks who are coming to product launch or maturity this year, with last year a time for preparing and positioning. In some companies (like LightPath (LPTH)) it was a time for refocusing in a new direction so they have a chance to really shine this year.

Healthcare remains a solid sector, but not bargain-basement in terms of large insurance or providers. Others like speculative Rockley Photonics (RKLY), forging ahead with 'clinic on your wrist' technology believed coming for Apple Watch 8 or others, are the leveraged bets in the area (for small speculative portions).

Meanwhile short-term is all about COVID, and maybe firming 10-year Treasury (SPTL). In health, knowing that vaccines don't prevent COVID but only severe disease (as important as that is), why regulatory agencies aren't pressing 'cocktails' of monoclonal antibodies that individually have shown some efficacy, continues to amaze me. I'm not accusing nor dismissing the cozy relationships with big pharmas, but I am curious why there's such a predisposition for vaccines at a time researchers already know they can mix antibodies, develop better Pills at the same time and for that matter, present new more effective vaccines.