Executive Summary:
- The intraweek rally began as anticipated, and it's not over.
- An upward extension does have psychological resistance, but can be overcome especially if we get a solid (and quick) Stimulus Bill.
- A big 'booster shot' won't be the rollout of vaccines (opposite possibly as side-effect stories are seemingly pretty grim), but the strong Banks and Oil stocks (we wanted both.. needed both.. to fuel this rally and got it).
- Although you got (of course) the Pfizer (PFE) FDA approval, note that a few of the bigger vaccine stocks were again on the defense, perhaps the twin doses of vaccine having fairly significant side effects getting attention.
- Amidst this Sorrento, which promises lower side effects by virtue of the low-dose nature of their monoclonal antibodies contrasted even to others using similar antibodies, holds steady and rebounded a tad, expectations are for (hopefully favorable) rulings for the FDA very soon.
- On that topic, Dr. Ji was on another virtual biotech conference outlining a slew of treatments and tests we know about, but illuminated a bit more as relates to improvements in tests (whether that's an excuse for delays or a real effort working with Columbia and the FDA we really wouldn't know).
- This week is about hopes and dreams, and an ongoing upside bias we've argued should or could exhaust, but we wouldn't fight it.
- S&P and DJIA have slowed-down as numerous firms are warning of new hits, and of course we've been on the lookout for shakeouts anytime now that we're in the 3700-3800 S&P area.
- However we are not joining the doom & gloom 'red alert' crowd and so on, barring some exogenous 'black swan', which all those bearish technicians don't know of either, so they're just playing off basic overbought technical indicators, and I suspect covering themselves since they definitely know it is a bull market driven by the 'Fed Put', as it has been for months.
- The Supreme Court throwing out Trump campaigns Pennsylvania case is not a swan, this was probably anticipated by most to be the outcome.
- Texas and other states filed a Motion against the Decision by SCOTUS, and Pennsylvania responded that their Motion doesn't address the statute in question, I'm not a lawyer and have no idea, and this remains pending.
- A 335-78 bipartisan vote to approve Defense Legislation, that authorizes pay raises for American troops reflected lawmaker optimism Congress is likely able to force enactment of the bill over Mr. Trump’s objections, that would be the first veto override of his presidency, but most politicians do want to be supportive of military pay and so on.
- There is a 'rotation angle' within technology stocks, some of this will shift in 2021 from tech stocks that 'almost solely' benefited from work-at-home to the better semiconductors (including our homerun AMD long-held stock it seems we intend to continue holding), and also network beneficiaries.
- 5G will come into its own, as today's 'consumer moaning' of little benefit is what we've spoken of, the products out there ahead of the 'real world 5G' as relates to truly fast longer-range coverage (carriers deserve consumer ire, since they have advertised 5G 'as if it would be transformative 'now', it will be over time, but for building-out networks it's more 2021-2023).
- Back to the vaccines, it now unfolds (also suspected but unfortunate) that a couple of the vaccines did not have the 90% efficacy in older groups as were limited in the 'trials'.
- Again while 90% of people don't catch it as a generalization, it means the 'great efficacy' be taken with a grain of salt, many remain dubious.
- Two patients on the AstraZeneca (AZN) trial died of unusual illnesses, and they were not in the placebo group.
- Unsure if I'll call this an endorsement, but Israel evaluated the alternatives and decided on the Pfizer vaccine, they have 8 million doses and will now commence vaccinations based on FDA approval (withheld pending that).
- Overall this is a tricky time coming right up with the COVID spread, a clear need for Stimulus, no perfect answer regarding shutdowns versus a more open approach, though broad closings are anathema to small business.
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