We all have our lists of stocks that shine a light on where we are going. Taken one by one, they can mislead us. But taken together, they are like high beams that can steer you in any weather and keep you from straying into the wrong lane.
Wednesday, literally every one of my "go" list lit up, and that means something very big could be afoot.
What's my go list? It's the companies that are doing OK, but if the pandemic were over or had run its course, would be putting up year-over-year numbers that could take your breath away. The go list says that, at this time next year, we will have found a way to go back almost to normal. Sure the virus won't vanish. But it will be tamed to the point that it won't be top of mind.
I am going to rip down that list here, so you know what a go pattern in stocks looks like, but the main thing you have to take away, the lead that can't be buried, is that the buyers have decided that science is going to beat the virus, so you better get on board or miss the move.
Now, some will say the move is because we are about to get a deal between Congress and the administration for a new package to help small business and renters and the unemployed that will keep them from going on bread lines or being evicted. I fully expect such a rescue plan and it would be nuts not to. Why help wreck an economy that was really humming before the Covid-19 grim reaper descended upon us. Anything that has anywhere near $600 in extra benefits per week and offers some sort of eviction protection or rent deferrals will help the small business people who are still alive.
But that's not what I am talking about. My "go" list is not about small business. It's about companies that need a vaccine to thrive and these stocks are saying loud and clear, the wait is over, it's going to happen, because our fabulous scientists have now set into motion so many trials and treatments that the beast will be dealt with and a new normal will be upon us.
I always figured this moment would happen. I said at the beginning of this thing that it would be much tougher than the government would realize, but we have so many fantastic science professors and researchers and medical whizzes at our drug companies that it was only a matter of time, so don't bet against them.
I knew it was bullish to say it, but after all the jeremiads I had thrown out there, I figured it was OK to say that our geniuses -- the kids you couldn't understand and were in awe of in high school and then never bumped into in college because you would fail all of the classes they were in -- would, in the end, tame, if not slay, the beast. I mean do you really think that once unleashed and paid for Pfizer (PFE) , Johnson & Johnson (JNJ) , Eli Lilly (LLY) , Merck (MRK) , Moderna (MRNA) , Regeneron (REGN) among so many others wouldn't eventually come up with something?
Of course, by predicting that, I had to open myself up to the usual ridicule, and not just on Twitter. Some very nice young person, Michael Steinberger, wrote in the Money issue of the New York Times that he was skeptical of the rally that started in March and his skepticism only grew when, and, I quote, "My skepticism only grew when I saw Jim Cramer -- yeah, he's still around -- on CNBC saying that bears like me were ''betting against science' and basically selling the country short, a comment that called to mind Otter's 'student court' peroration in 'Animal House.'"
It's funny, looking back, I think that bears like this nice fellah were basically betting against science and selling America short, and would be proven wrong and I think that, unlike me, who is still around, he won't be when my thesis pans out. And, for the record, I was never an Otter fan and am far more like the three guys sitting on the coach in the hilarious Omega pledge scene. Oh, but let's not forget, Jimmy Chill holds no grudges and I hope Mikey gets a Pulitzer for most gratuitous insults, do they still offer that one?
So what on my go list tells me that science is within a few months of starting to win this war against this murderous beast?
Drum roll please: First is Dupont (DD) . Here's a high quality industrial that's linked to housing, autos, electronics, safety, construction, imaging and transportation, nutrition and biosciences. Almost all of these markets have been threatened or stymied by the virus. My charitable trust has been buying it on the theory that science can win out, but it hasn't been until now that I could say the economy bears could be wrong.
Same with 3M (MMM) . J.P. Morgan Securities' Steve Tusa, the best industrial analyst in the world, spoke positively about the stock Wednesday, suggesting that it could be turning a corner. I thought so, too, after that last conference call where CEO Mike Roman talked about July looking much better than June. I like that one, too, right here, right now.
Disney's (DIS) on my go list. I told you Tuesday night that cost controls shocked us and saved the quarter. But Wednesday's run is about the notion that science is going to eventually triumph over both fear and social distancing. Sure, they did better than expected, but you don't get this big a leap, unless the people selling the country's scientists short are capitulating.
When we are about to see a spurt in world commerce, I look to two stocks as beacons: Mastercard (M) and Union Pacific (UNP) . They are the barometers of activity and their stocks wear it on their sleeves. She we got good fintech pin action off of Square's great numbers but Mastercard failed to rally when it reported because there's been such weak cross border traffic, because of the pandemic. The stock says that's ending. Union Pacific is a bellwether for back-to-school and holiday season clothes from Asia going east. The action says the bears betting on Covid-19 to destroy Christmas like it has destroyed everything else might be wrong.
Apparel's a tell. Nike (NKE) putting on points is always a good sign, but the better ones are the come back of Ralph Lauren (RL) , which really wasn't all that bad yesterday, but more important, PVH (PVH) , which has been taken down to the Covid woodshed long enough. PVH is the go list personified.
Finally, there's three more industrials on the list that don't get a lot of attention: PPG Industries (PPG) , Emerson (EMR) and Nucor (NUE) : Coatings, motors and steel to over-generalize and give a nod to their chief products. When you get all three up, especially after so much carping about Emerson's alleged weak quarter, you, again, have to think that the big money is either hedging its recession bets or siding with American science, or both.
Now Covid-19 is a tricky beast, and it has confounded all of those who don't wear masks and don't social distance. To think that we won't have some outright failures from drug tests is fanciful. But when my go list goes green, which it hasn't in ages, it means to me, not that Washington's going to get its act together -- spare me -- but betting against all of those incredibly smart kids at high school, the ones who actually looked forward to taking chemistry, was always a mug's game.