The Bright Side
There were silver linings present everywhere. "Covid fatigue"... "Politics that will leave half a nation feeling cheated regardless of the outcome"... "An old normal that we'll likely miss forever"... "A new normal that we will have to adapt to..." No relatives coming in from afar -- some of them are gone now, the rest are just not crazy enough to visit in these times, nor are we crazy enough to have them. That is sad, but that said, there were silver linings present everywhere.
Less folks meant a much smaller bird, and less sides, which in turn means much less preparation. By the way, we bought far more than we needed, and donated most of it, I noticed so many others did that as well. Having no visitors for the holiday also means no mania-fueled "all hands on deck" house cleaning. That was nice. Extremely nice. Oh, there are still some leftovers, just this year, they fit inside the fridge. Oh, saved money on pies, too. With no one to impress, suddenly grocery=store pies were "good enough"... no waiting in block-and-a-half long lines on Wednesday afternoon at the best bakery in town.
The downside? Oh, there are clear negatives. Those lines on Wednesday were reserved for those trying to get a Covid tests ahead of seeing their relatives the next day, even though a one-day lead time is nearly meaningless unless you already had been effectively quarantining in this Covid world. The local numbers of reported new infections out on Long Island (that I follow very closely) simply exploded on Wednesday. My guess is that some of those returning to wherever home is for Thanksgiving and may have been asymptomatic, or close to it, were greeted with the unwelcome news that maybe they should avoid their families (and everyone else) for now.
There was one more thing, that while very touching, I found quite uncomfortable. No, not the awful excuses for professional football games that aired nationally on Thursday. As always, we go around the table on Thanksgiving as we say grace. Everyone says out loud something that they are grateful for this year. It is the strangest feeling in the world, when one's spouse leads off, then our children follow in expressing just how grateful they are that you, the guy sitting there hearing this.. is still alive. You hear, as they almost come to tears, that they actually had started making plans just in case one day back in March or April I did not get up and force myself to work. My wife says that there were three days that she was not sure that I would wake up. I remember only one day where I was not sure myself. Then, in the pitcher's spot I bat last, and all I can think of is that somehow through the grace of God, locking myself in my office actually worked, and through a miracle, I did not pass that infection on to these wonderful people seated around the table. No time to let your guard down. The fight's not over. Stay tough, America.
As Promised
We promised -- OK, we really did not promise, but we did warn ahead of time -- that Wednesday would get sloppy, and sloppy is what we got. Aggregate trading volume declined significantly on Wednesday from Tuesday at both the New York Stock Exchange as well as the Nasdaq Market Site. That said, trading volumes were not low, just lower when compared in relative terms to mid-November trends. Trading volume directly attributed to constituent member companies of the S&P 500 did reach (just barely) its own 50-day simple moving average (SMA) for activity. That level was exceeded for the constituent membership in aggregate of the Nasdaq Composite. The sixth busiest session of the past six was also the ninth busiest trading session since mid-July.
Speaking of the Nasdaq Composite, that index managed to tack on less than half of one percent, while the S&P 500 just edged slightly lower (-0.16%). Recent leadership had come from the Transports, the mid-caps and the small-caps, and this is where there was at least some profit taking on Wednesday, but there was nothing even close to a rout. Sure, losses were grander across the Energy, Materials and Industrials sectors, as bond proxies and Information Technology led to the upside, but there is not really that much to read into that performance other than Exxon Mobil's (XOM) internal opinion on crude, apparently... and that opinion can still hurt the entire sector.
For the day, winners and losers were close to well-balanced, while advancing volume clobbered declining volume at the Nasdaq alone. The corporate headline away from Exxon Mobil was probably the interest shown by longtime Sarge fave Salesforce (CRM) in Slack Technologies (WORK) . This story put the hurt on Salesforce, which is a holding of Jim Cramer's Action Alerts PLUS charitable trust, while taking Slack up an astonishing 37%. As a longtime fan of Salesforce and its management, events such as this don't bother me all that much. Where CEO Marc Benioff sees opportunity, opportunity usually does exist.
This is for fellow Salesforce shareholders. The stock gave up the 50-day SMA on Friday. This is the kind of thing that I mentioned the other day in Market Recon. The stock will be unpredictable today, and there could be decisions made by underqualified individuals as a half-day trading session beckons. I write this note as late night turns into early morning. Those who have ever been kicked out of a bunk bed by an angry man wearing a "Smokey the Bear" cover, refer to these as the zero dark-30 hours.
That said, should there be any downside momentum later today that appears to show resistance at that level ($251), there could be second- or third-string risk managers forcing second- or third-string portfolio managers to reduce exposure above that late August gap that remains unfilled. You do what you want. I see that gap starting to fill, let's say next week some time, perhaps on hard news... that's where I'll grow my long position.
Who's in Control?
For the most part over the past eight months, I have written that the virus is still in control. That much is still very true from a day-to-day perspective. The rate of spread is alarming. Hospitalization rates are on the rise, as are Covid-related deaths. Fortunately, mortality rates are very low. Unfortunately, so are full-recovery rates, a point that somehow is often overlooked by most of the media. Recovery from Covid is not measured in days or even weeks. For many, it's months to perhaps years.
I show progress. I even gain a little weight. I fight back every day, but others have it even worse. What does that do to the economy long term? So many who will not be able to fully participate for an unknowable length of time, and now they say the severity of the inflammation syndrome has nothing to do with the severity of the virus while infected. What are the implications down the road for the asymptomatic? My doctors have no idea if post-Covid Syndrome is a lifelong condition. They just don't know any more than we do. They just do what they can for symptoms as symptoms come and go.
The good news is that as we hit perhaps the nastiest stretch run of the entire pandemic, the virus closes in on losing the control that it has held over the planet for most of the year. There has been good news released by Pfizer (PFE) in collaboration with BioNTech (BNTX) . There has been good news released by Moderna (MRNA) , a stock now truly breaking out. The good news released by AstraZeneca (AZN) earlier this week has become somewhat less rosy than first thought, but Johnson & Johnson (JNJ) is thought to be closing in on releasing data in time to apply for an Emergency Medical Use (EMU) from the Food and Drug Administration (FDA) in early 2021, in time to add supplies to what Pfizer and Moderna are hopefully already doing by then.
This puts the vaccines and the logistical ability to distribute them in control of the virus, and not the other way around, and probably in just a few months. My governor in New York is Andrew Cuomo, and I am not about to get political here. I grew up with his younger siblings and have gone back and forth between liking him for his Queens guy persona and his ability to communicate and disliking him for this inability to admit error where error clearly exists. The governor has recently used the scattered ability to test nationally as a means to cast doubt over the ability to effectively distribute vaccines and therapeutics. Folks, and I repeat this is not political: The comparison is apples to oranges. We should hold on to more hope than does the governor.
Testing has been done at the local and regional level with federal support in terms of funding from the start. Tests had to be created from scratch for a disease that was completely unknown to us as recently as early 2020. Distribution of these vaccines and therapeutics going forward will be conducted at the national level by the U.S. Army and corporations such as McKesson (MCK) , United Parcel Service (UPS) and FedEx (FDX) . All the states need to do is give the feds locations, and then take it from there.
Let me tell you something. Nobody on the planet does logistics better than the U.S. Army. You can count on that. They are the best of the best at supporting large-scale operations. Then, you want to look at distribution: McKesson, UPS and FedEx, all the best at what they do.
Bringing CVS Health (CVS) and Walgreens Boots Alliance (WBA) into the fold so that common people can get immunized in their neighborhoods is in the plan, and is also where it gets tricky. Why? Because this is where local leadership once again becomes key, and that leadership (shot taken at no one, nor either side in particular) has been inconsistent to say the least. Some states will do this well, others probably not.
We are going to beat this. We are going to grow this economy in 2021. We are going to feast with those we have missed for months now on Thanksgiving Day 2021. Maybe the football games might be a little more entertaining. Victory is almost in our grasp. Don't screw it up. You're almost there.
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