Better to be sorry than safe? That's the mind of this market that abandoned all sorts of safety and went all in on the stocks of companies that they will be very sorry about if all the good news in the last 24 hours doesn't come true.
The fine-to-be-sorry crowd are taking the news from the science and financial worlds and running with it with reckless abandon.
First, whether it be from the president's tweets or from the pictures of lines to get into bars in Ohio or Wisconsin or the packed beaches at the Jersey and Florida shores, we know America is opening for business again. Now, there are plenty of rules and regulations about what can and can't be done -- masks, social distancing, washing hands -- but if anything was clear from this weekend, almost nothing was obeyed in most places across the country. It was almost business as usual, the virus be damned.
You know there were plenty of people who were more than willing to be sorry than safe, and I heard an earful from New Yorkers who almost made it sound like they wanted these areas to find out what we know here, that this darned thing is so contagious you are more than likely to get it than not.
Only after I explained to the doubters that the law has been flipped on its head and the people who are at risk can self-quarantine while everyone else seems willing to bet it's over -- or they won't get it or it's not serious, or it doesn't even exist -- that they understand the sorry than safe dictum. Still, it was joyous to see some business being done, even if one month ago we would have regarded them as reckless idiots who should be locked up for their own protection.
Then, we got a look at a totally reassuring, almost avuncular Fed Chief when Jay Powell sat down with Scott Pelley of "60 Minutes." Powell quietly let it be known that there was "no limit" to what he could do to right the economy and that he was by no means out of ammunition in the fight to get the economy back on its feet. The sum total of his comments? He will do everything it takes to get this ship righted. He's got our back. It was powerful stuff, maybe not as powerful as when Ben Bernanke came on "60 Minutes" in 2009 and called the bottom by saying there would be no more banks collapsing, but then again, unlike in Benanke's tenure, we haven't had a lot of banks fail and certainly no one big.
I think the understated and powerful way that Powell spoke, almost Lincoln-like -- you remember him, he lived in the White House, too -- boosted markets overseas. But more important, it sent the oil market back over $30 as you could only feel more optimistic after the appearance. Oil's struggle in the teens and twenties seem suddenly like things of the past, as do the possibility of mass bankruptcies in the Permian.
So all of these signposts of strength were set to buoy the market and the Dow Jones Average followed the signs, it was look up 350 points not long before the bell.
And then, boom, the news hit: Moderna (MRNA) , the company that had the lead, the company with the unproven RNA technology, announced good news from a small phase one test. Usually all we care about is safety at that stage. We don't want the vaccine to hurt anyone. But in this case we got a positive read through of people who were able to create neutralizing antibodies. Basically, I will skip the gobbledegook: although it is a small number of people, eight, who got a higher dose and were really able to stop the darned thing cold, Moderna may have a magic bullet to beat this thing.
No one wants to be too optimistic. All reports were muted: safe, protective, promising, better than thought, might prove fruitful. Nobody's doing cartwheels, but the market acted like the people who hit the bars or the beach this weekend. We all know that vaccine creation -- to market from start to finish -- can take many years. Some vaccines took decades to make: polio. Others aren't even available after all of these years: AIDS. But Moderna's got something that others didn't back then, a digitization strategy where they actually use Amazon (AMZN) Web Services to calculate trillions of courses of action in no time flat. Even as I don't pretend to understand exactly how their RNA strategy works, I know that if you can eliminate strategies and pathways that aren't working without trying them out, it sounds like a computer generated animated design vs. a cartoonist using a sketch pad.
Before this news, all we had going against this scourge was an old drug, Remdesivir -- controversial because no one claims it even saves lives.
But this?
Moderna?
It could make it so we have one of the shortest and deepest recessions in history, at least if you look at the market as the stocks that soared were traveling or oil or oil-related, auto or auto-related, home and home-related and most important: banks. Today was the first day where I said that maybe the banks aren't going down the drain with Drano. It's pretty amazing when you think about it, but if Moderna and Powell hadn't gotten into the news, all we would have had to work with when it came to the banks is the gigantic sale that Warren Buffett's Berkshire Hathaway (BRK.B) (BRK.A) made of Goldman Sachs (GS) . Instead of being down about 4%, reasonable if your stock is sold by Warren, the stock was up 4%!
I was shocked to see some of these moves. United Airlines (UAL) , up 18%. Norwegian Cruise up 17%, Marriott (MAR) and Royal Caribbean plus 15%. If you didn't know any better you would be convinced that we would all be vaccinated in a few months. It's not so silly though. I looked at prices for refundable cruises for Norwegian Cruise lines (NCLH) and I found one going to Alaska on the Bliss next year that was a third of what it would have gone for. If you think the vaccine will be readily available, why not book now and cancel later if Moderna fails? Won't one of the others, Johnson & Johnson (JNJ) , or Regeneron (REGN) or Pfizer (PFE) or Inovio (INO) or Novavax (NVAX) come through?
Yes, the optimism is that palpable.
Now, I know there is this tendency among professionals to talk about all of the money that had gone into the Covid-19 winners would then run to the companies that had been losers, but that just didn't happen. There's too much momentum in these kinds of names, the drugs, the big retailers and the cloud stocks, that they couldn't sell out. You want to sell Nvidia (NVDA) ahead of its quarter? You want to bet against Facebook (FB) with a brand new, smart, small business strategy? Is this the time to abandon ship, Alphabet (GOOGL) when it might be doing better than we think if we are coming out of a recession soon?
No.
Don't begrudge a Nucor (NUE) it's 7% move, because it is a steel stock. Why not have the housing stocks run? Their valuations and the valuations of so many stocks are so cheap that they deserve a little money through their way.
Today's a day, though, which shows you that the strategy I laid out for my charitable trust, which you can follow by subscribing to Action Alerts PLUS, a strategy of having a barbell where you have on one end, the stocks that do well in an endless Covid-19 hell and on the other stocks that rally like all get out if a vaccine could get approved. That was the best strategy for today and it will be for the post-good news Moderna market going forward. Let's hope, though, that safety's not always the last thing that people think about; we don't want you to have to say you're sorry.
(Amazon, Johnson & Johnson, Alphabet, Nvidia, Facebook and Goldman Sachs are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
