Major League Baseball's gearing up for a season, a season that starts in May, and, all the teams will play in the Phoenix area, according to ESPN. The Centers for Disease Control and Prevention and the National Institutes of Health are supportive, and even though there will be no fans, and the players and coaches would be sequestered. It looks like, once again, there is a semblance of normalcy in the world.
While this bizarre, albeit exciting, plan isn't what drove the market higher Tuesday, it is certainly metaphorically correct. We are supposed to be in one of the saddest moments in history, a moment where we are seeing an acceleration in deaths from Covid-19 and investors are saying, we are in that awfully dark period right before dawn.
And what does dawn look like? According to this action it looks like a "V," meaning that we are on the verge of normalcy with a recovery that will put us back to where we were the last time we enjoyed ourselves, the last time we had a few beers or went to an NBA game or dreamed of March Madness. A V says look out Covid-19. We know you now, we have your number, and we are going to kick your butt out of the U.S. as surely as the Chinese did when they returned to their Communist Grandeur.
I am all over the idea that we can come out of this. We are a strong country. I have never, for a moment, doubted the scientists whom I believe will come up with both an antiviral to get us out of the hospital quickly and a vaccine that will keep us from getting it at all. I have not been in league with the hedge fund managers who came on air and questioned the viability of society and wept for the Way we Were -- like who wouldn't? I have not bought a home in the Pandemic Islands, a secret chain of isles, like the Seychelles, hidden from all, including the next Fyre Fest promoters.
But I do not share the V. I wish I did, I really do. The V is what justified this rally. It's what says don't sell, don't let anything go, just let it ride because not only are we going to play ball, but our stores are going to open, we will be traveling, flying our darned fool heads off, and judging by the credit markets -- the guys who make you loans -- we'll be cruising. Damn the Covid, full speed ahead.
There are only three problems.
One, we still don't have an effective way to treat the disease.
Two, we don't have an effective way to stop giving it to each other when we have it but are asymptomatic.
And, three, we haven't seen any real peaks in sickness since we started staying home, other than some decent numbers in Ground Zero, which is New York.
Now, I have no idea when we will get something to make it so your lungs aren't destroyed by this illness if you catch a strong version of it. We don't even seem to know what a strong version of it looks like, not at least immediately. How could the prime minister of England be at home for nine days, working his butt off, and then go to the hospital where we hear nothing but good things, even though you don't go to the hospital if you are getting better with this thing, and then he is in the ICU? You better believe he has the best care in the world and yet the disease keeps outsmarting people.
As it is, because we don't have enough personal protective gear, we still can't even keep our health care professionals safe, let alone our patients.
How about the tests? We are hearing mixed things. The fast tests may not catch everyone's illness or budding illness or soon-to-come illness. Remember, this is no ordinary flu. We aren't seeing much testing. My idea of giving everyone a wrist band to go with the mask, green for you are OK, red for go home, hasn't taken off yet. But how else are we going to distinguish who can go to work, who can shop, who can go out from the carriers who might kill us if they do.
A week ago, we saw the market plummet when we heard from the White House that there could be 100,000 to 200,000 deaths from Covid-19. Since then, we have had a number of anecdotal reports that things have gotten better, particularly in New York, and that number could be wildly high since we only, and I have air quotes around "only," 11,000 deaths. At least we recognize that it isn't just the flu or the common cold, so people are taking social distancing and masks much more seriously. That matters. We can't slow it or bend the curve, if we don't.
All that said, we are quite a ways away from hedge fund managers, who would tell anyone who would listen that civilization as we know it is about to end.
We know we have made progress and that, judging from the China-back-to-work scenario we could be like that, too. Retailers, which were viewed as dead or dying, have seen their stocks double off the lows. The cruise ship lines look like they are all going to have the financing they need, especially if the one that is most hobbled, Carnival (CCL) , got some. In fact, the credit markets seem open for even the neediest.
Plus the Fed and the administration are acting in tandem to put this ailing economy on steroids. The loans, the backstops, the grants, they are mind-blowingly positive. Have they ever learned their lesson from the last downturn. Hate him or like him, President Donald Trump is pulling out all of the stops to get this economy moving,especially the small- and medium-sized businesses that are so often left behind. Without this help our country will be controlled by handful of big box retailers and restaurants. That's unconscionable.
There's only one problem: the customers. Or a lack of customers. You see I don't believe in the concept of the V. There's too much fear. And this isn't like Franklin D. Roosevelt, when the only thing we had to fear was fear itself. We fear the oddly named Covid-19, because it is novel and because it can be deadly. Sure there are more total deaths from lung cancer, or from accidents, or even the regular flu, but this thing is virulent, way too easy to catch and you don't just get better hanging out at home for a couple of days watching Netflix (NFLX) .
This means no matter how much money they pump into the economy or make you feel we have medicines that can put us over the Covid hump, I think the best we can hope for is a "U" recovery, one where baseball can start and it's not, "Tag you've got Covid-19," but, "Tag, you're out." But don't expect to be going to any games yourself unless you want to get on a plane -- holy smokes -- and stay in a hotel -- are you kidding? Or an AirBnB, you must be out of your mind.
A U make sense, because a U means we know who has antibodies and we know who can get it or has it.
At least I didn't say it's one of two other letters, the "L," which has no recovery, but levels off at lower level, or the dreaded "W" where we shake it, we go up, and we go back down again. Although the W has another leg up, we can't afford to have that letter visit us.
Which is why, as I have been telling members of the Action Alerts PLUS club, it's fine to lighten up here. We sold a lot of the stock that we bought in the downturn and have gotten back to a high cash position. Why? Simple, we spell differently from the people who bought, when the Dow was almost up 1,000 points. We like our spelling. Not trying to win you over, just explaining the alphabet as we see it in the midst of the pandemic of 2020.