E Market Briefing For Wednesday, July 8

Tensions ramping-up again - across a broad front of contentious issues as we move towards new challenges on the geopolitical, domestic political, pandemic, and even financial funding (need for more stimulus or impossible situations) as we migrate through July. Few are pleased with where the funding got directed.

Executive summary:

  • A drawn-out economic recovery is a bleak prospect, but likely the only one that exists for now; unless we suddenly encounter an anti-COVID-19 pill.
  • However a 'one-legged' revival is better than a 'no-leg' recovery, so there's that, and all we need to do is muddle-through the pre-treatment interval.
  • COVID-19 is actually more significant than the virtualized political alternatives for now, though politics become more polarized (unnecessarily likely) soon.
  • The 'pace' of recovery is of course threatened by renewed closings, and it is pretty widely-accepted that we'll have to live with the virus along the way.
  • n in most states) to proceed gingerly;
  • That applies except in those places where they abused the reopening relief so badly, that there's really no alternative but to shut-down again for now.
  • The general idea remains (among discussions) that efforts with the antibody treatment procedures, will buy some time, but that is all, as it's likely they do not provide longer-term immunity (perhaps enough until vaccines or effective antiviral drugs arrive, as we all wish from therapeutics for now).
  • 'Great expectations' implied by 'super-cap' equity prices are really not profits or revenue-based (for now), but fueled by the TINA structure, which again is calling upon too much from the Fed's delegating bond (or equity) buying as well as sustaining it, which also builds bubbly-behavior in those sectors.
  • Now sectors benefiting from the 'new normal' continue attractive (pausing to refresh also), whether in technology, medical care and related, sure, periodic consolidations or corrections will occur in these areas too.
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William K. 4 weeks ago Member's comment

That "Federal Stimulus" money is doing two very bad things to us. First, it is adding to the very huge burden on those folks not even born yet, and right now it is fueling a boost in INFLATION as it throws more money towards bidding up the prices of fewer goods. The fewer goods part is obvious to anyone who has been to a grocery store, and the bid up prices are clear to any who have paid for those groceries. This is happening at a time when more folks are needing to live off of their savings, which inflation is eroding the value of. And the whole purpose of the inflation is to hold share prices and profits up.

So here is a warning: We will not forget this when eventually the nation recovers, and those guilty will be out of jobs. OR possibly MUCH WORSE!