E Market Briefing For Wednesday, Dec. 16

An excess liquidity case - is the latest explanation for driving equities higher in the near-term. It's not really that simple, though if one means the managers who denied the rally from the March lows (Inger Bottom) for months, well yes, some of them have been putting money to work belatedly, trying to improve a summary of their results for the year or perhaps the 4th Quarter.

Meandering better describes most stocks here, with the tax-related behaviors often seen (rather traditionally) toward year-end. Many of today's leaders like Apple, which we thought had to lead the S&P higher, are actually rebounding from prior minor shakeouts, and possibly have further challenges in early '21, while concurrently those most-impacted (and depressed) might rebound.

Executive Summary:

  • S&P rebound on-cue, but also helped by movement towards 'relief' bill, inline with Buffet's comments (echoing my own), and possibly McConnell emphasizing our Constitutional processes versus candidate preference.
  • Combined with the 2nd (Moderna) vaccine approval looming, lots of the angst 'seems' mitigated, while still leaving big stocks at pricey levels.
  • After 1 single dose, Moderna's vaccine apparently reduces asymptomatic infections by about 67%, don't know about the 2nd dose, but that's great news.
  • Moderna (mrna) showed more reactions after 2 doses than Pfizer (PFE), so this really is encouraging, as I mentioned my personal physician prefers Moderna's but he wasn't clear as to why.
  • There will always be people needing 'treatment' and testing, hence we're remaining very interested in monoclonal antibodies, and the two plays are not overpriced, but that doesn't mean they can't weaken near-term, nor of course does it indicated which if any will be successful with the FDA.
  • The encouragement to use 'monoclonal antibodies' won't work well with the current dose levels being high, useful only for early-stage patients, and needed long IV treatments.
  • This does not invalidate the drug, it recognizes that in early stages most people are advised to stay home and so on, so the antibody drug front is going to be a very big deal once you get low-doze single-shot IM drugs.
  • Sorrento is in the hunt to do just that, and having the Dept. of Defense at this point interested in Inovio 'also' looking at that validates the direction we've been talking about, even AztraZeneca (AZN) wants to get into this.
  • As for Sorrento (SRNE), it's been under persistent pressure, gives back gains easily after light (the DARPA) good news, and is fatiguing to investors.
  • Today is likely to misunderstanding 'why' COVID-patients aren't offered the antibody treatments as a rule (and that's because it has to be very early in the disease, and that requires hospital administered IV's).
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