No one even knows why "it" does this anymore, which means that this market takes its overall cue from whatever's the worst aspect of overnight trading. Is it because, once again, the big boys, the ones with the algos, just send our market down because Europe and Asia are down, as if all of our companies are one big cesspool of S&P money?
Is it because there is S&P money coming out every day, because CDs are so safe versus this casino? Is it because there is nary a day that goes by without some revelation about our president, and that there is now a cohort that believes impeachment is around the corner? Or is it the boom/bust cycle that is going on simultaneously, the one that you could make a case to cut or raise?
No matter, what I like to do in these cases is identify the big-cap stocks that never come in, other than on days like today, and accept that they will be down at the opening because of the wave of S&P futures selling, but then the same, persistent buyers will come right back and snap them up in unison.
Before this horrendous "buy the dives" moment, as my friend Marc Chaikin says, you would just buy FAANG-- Facebook (FB) , Amazon (AMZN) , Apple (AAPL) , Netflix (NFLX) and Alphabet/Google (GOOG) , (GOOGL) . Now you are taking your life in your hands if you do so, because they have no bounce whatsoever on days like today. That's how the complexion had changed.
So what do they reach for? And, I mean reach for, because they don't like these stocks to come in after the first few minutes:
- Procter & Gamble (PG) : This is the new darling of the packaged goods stocks, because it delivered a nice organic upside surprise last earnings -- and the buyers can't stay away. A cynic would have thought that the Merrill Lynch upgrade yesterday would have seemed late after this run. The cynic would be wrong. P&G is anointed now. It is going up, not down. I wonder if the buyers will even let it come down today.
- McDonald's (MCD) : The remodel story is playing out; the management's value packages and technology leaps has the franchise base energized. It is, frankly, pretty unstoppable.
- HCA Healthcare (HCA) : They can't stop buying the hospital stocks. It's an opioid buying addiction. The estimates are always too low, because this company is cleaning up. It's ironic -- the prices for health care have stopped zooming but it doesn't matter. The buyers love HCA's earnings surprises, even though at this point they are totally manufactured.
- Merck & Co (MRK) : Here's one that goes up relentlessly, because Merck's anti-cancer franchise is better than that of its competitor, Bristol Myers-Squibb (BMY) . We all pretty much know this, but every head-to-head test somehow is revelatory.
- Any health insurer. Right now Cigna-Express Scripts (CI) is as loved as it was hated when the deal was done. It's all pretty amazing, because nothing improved in the interim. You can sub Humana (HUM) or Action Alerts Plus name UnitedHealth Group (UNH) , although that one you buy down 7 only.
I reiterate, this market is treacherous. But these are the names that never seem to go down in a market sell torrent. Let's see if Friday is typical of the miserable selloffs that have become an odd staple of this time.