Heaven forbid we could have a sleepy Friday October.
But no such thing. We learned in the early morning hours that President Trump and the First Lady have Covid-19. We don't know how bad they have it -- doctors don't either, hence the trip to Walter Reed and the inclusion into the Regeneron (REGN) trial to reduce the viral load.
We don't know how many people are going to come down with it from their own interactions -- and there have been and will be plenty. Most important, we have no idea how it will impact the running of both the campaign and the country, something that seems pretty darned important given the millions of people who are out of work because of Covid-cancelled businesses as we learned from Friday's non-farm payrolls report.
If that isn't enough where's the stimulus needed to help them? Is it bottled up because the Secretary of Treasury and the Speaker of the House can't agree? Or is it because both the President and many Republican Senators think that we are in a rip-snorting bull market and therefore the economy is much better than you think.
One thing is certain: The President is NOT saying no to money for the states. Plus, the Speaker is willing to bargain on that amount. So maybe we get a compassionate use bill?
Anyway, the crazy mixture produced a huge down opening but as is the case ever since Covid hit us, buyers can't resist the lower prices and they snap up anything that doesn't need government help and does need Covid to continue untamed. You aren't going to see the stock of Peloton (PTON) go down when the President and a bunch of Tennessee Titans are struck by Covid or when Cam Newton tests positive as is the case Saturday morning. Who is next?
When the President can't leave the hospital and then, next, the White House, it sounds like an advertisement for Zoom (ZM) . No wonder the Nasdaq was still up about more than a percent for the week although as we all know the Nasdaq took it on the chin in the afternoon portion of the session. Even Zoom got hit!!! No doubt a program out of tech into cyclicals, something we have seen every time people get hopeful about a stimulus package no matter how small.
I say, ignore it. We bought some cyclicals into weakness as per the Action Alerts PLUS bulletins we sent out, but are not selling our tech names because all moves out of tech between here and the end of the year might be ephemeral. When you get a powerful move and it lasts this far this year without interruption and you don't expect one -- do you think we cure Covid between now and January -- you roll with the punches and the stocks.
Which brings us to Monday. That's the day I expect to hear a ton of things, including: one, a sense of how sick the President is and the impact on the campaign; two, how many other people have come down with it; and three, whether the hitting home of Covid inspires the President to tell Secretary Mnuchin to make a deal while he corrals the recalcitrant Republican Senators. Without it I expect to see the hapless banks to take a hit because they are the ones that stand to benefit most from any bailout, save the airlines. They are on the hook for a lot of loans to people whose jobs were wiped out by Covid. If there is a deal it will be because they need and want one so badly and even if their stocks stink they have a lot of power in Washington.
Why doesn't the market get hammered more when the pandemonium rivals the pandemic? Because of companies such as Nvidia (NVDA) , which has an analyst meeting Monday. Nvidia's a special company because its founder and CEO Jensen Huang's a special guy. I call him a modern day da Vinci because if you have ever visited the da Vinci Museum in Florence, Italy you will see what the heck I mean. Da Vinci thought about things well beyond the ken of the times, helicopters and other machines that made no sense to his compatriots because they couldn't be grasped. Let's see if Jensen tells us about what he's got in store for us and we mortals will try to understand the wonders.
Tuesday, we hear from Paychex (PAYX) and I want to get some verification about how many businesses have pulled the plug on their companies and their workers, a number I believe that could now outweigh job creation. Small business is on the ropes battered by the twin enemies of social distancing and the big-box stores that can handle that solution. I want a breakdown of where the weaknesses really are.
Wednesday, we get mortgage applications and we want to be sure that the only real engine of the economy, save those that can fall under the categories Zoom or Cloud, stays hot. Jay Powell, the only real hero of our time, if I can borrow a phrase from old Cramer fave Mikhail Lermontov. As long as housing continues to perk along we can continue to stick by Amazon (AMZN) , Walmart (WMT) , Costco (COST) , Home Depot (HD) , Target (TGT) , Lowe's (LOW) and now instant Cramer-fave Bed Bath & Beyond (BBBY) , which is in the first inning of a turn.
Thursday, the technology firm known as Domino's Pizza (DPZ) reports and I expect another solid, Covid-inspired number. Sadly, with Domino's the more Covid the merrier. Can I tell you I had a small Domino's no cheese tomato pie on Wednesday and it was easily the highlight of my pathetic pandemic week although there were no banana peppers. That's OK, there were no bad tasting wings either.
I expect a blowout number.
We also have an analyst meeting conducted by Marvell Technology (MRVL) and this confab will be very important for all of cellphone tech because Marvell and Skyworks Solutions (SWKS) are probably the two most concentrated 5G plays there are. Marvell has put together two magnificent quarters as it transforms itself into a company that's pretty much all proprietary stuff. If they tell a good tale you should see terrific pin action from NXP Semiconductors (NXPI) , Texas Instruments (TXN) , Qorvo (QRVO) , Qualcomm (QCOM) and even the recently defeated Micron could get a needed boost.
Finally on Friday we get earnings from Duke Energy (DUK) . Normally I wouldn't care about this stodgy utility but earlier this week we read stories about how NextEra (NEE) , an aggressive utility, was trying to buy them. Let's put that rumor to rest.
Overall, I think next week is what's known as a positioning week. We are about to come into a historically difficult time, when the banks report. One thing I know about the banks: their stocks almost always telegraph their earnings or lack thereof.
I want to be really careful about this. The banks are on the hook for so many unpaid mortgages and I think that you have to be aware that they can easily have to boost their reserves for criticized loans. Owning the group into earnings without a sizable dip next week could put you in a house of pain as they will settle lower if the earnings are as weak as I think. Be careful with that group and with the oils. They are saying that their industries are in real trouble. It's saying something when the cruise ships, those once Covid capitals, now trade better than either group. Keep that in mind if you are tempted to trade in those treacherous waters.
Will we get stimulus? No. Will we get a Peloton? Yes. Will we travel face to face to see business clients after the president, catches Covid? Will we get so more computers to run Zoom on? Yes. Should we panic if Covid rises up and engulfs a whole new cohort? No. Should we buy into the weakness? Yes.