Now the numbers are really looking terrible. Twenty million cases of flu, 210,000 hospitalizations. A total of 12,000 deaths. And it isn't over. It's still infecting, it's still raging, it's fluid and it's dynamic. The numbers are staggering, much higher than we thought.
There's only one issue: these are the numbers from the beyond wicked NON-novel flu that's sweeping the country here. And that's with a flu shot that few people take and yet it would prevent most of this carnage.
The numbers, the comparisons, are starting to dawn on traders. China may have a real bad flu bug. If treated well though, it is possible to control, with some triage the real rate of death as there are now 5123 recovered for 1117 deaths a ratio that you could argue is negative, but a relative number is pretty innocent.
And that, plus the Democratic Party in disarray, with a New Hampshire winner that Wall Street perceives as unelectable have combined to produce one more positive day. I never quibble with a rally. Stock prices are up. You can sell any stock that's up and take that money to the bank and no one will say, "sorry that was made off of euphoria, we can't take it."
But we do have to ask whether all of this positivity is justified. So let's take them head on.
First, is the virus under control in China? Absolutely not. It's still fluid and dynamic. There is nothing for it.
We do have a plateauing in China but it is still popping up pretty much everywhere except the United States at least so far. The quarantine is working, the danger arguably lessening if you study the numbers.
But Wall Street wants to get ahead of the story. It's blessing any company that quantifies China loses, from Carnival (CCL) with is very visible duo of cruise ships in the mix, to PVH (PVH) and Nike (NKE) . Carnival is a classic example of the hope that is now infused in the market.
It has two ships in China that are in the crosshairs. One is the Diamond Princess, which has 3600 people on it and is under the care of the Japanese. I should put quotes around the word care because according to the New York Times only 439 had been tested as of Tuesday and 174 are infected.
The second, the Westerdam, a boat with NO virus on it had to go to five ports before Cambodia took them in.
That all sounds pretty bad. You have to wonder who would take a cruise right now with this flu sweeping through cabins. The answer, judging by the amount that Carnival this morning said it can lose, 55 to 65 cents, indicates that cruising is still wildly popular because that number, while material, is not as harsh as most observers thought. More important it was quantified which is why Wall Street's reaching for the stock.
If things stay the same I believe you will start hearing that the U.S. flu is much worse than the Chinese flu and the only difference is we don't talk about it endlessly.
Given that this is a crucial week, first week back from their Lunar New Year vacation in China, I think that we should presume that more and more factories go back on line and while GDP is greatly reduced if you believe that the situation is stable, then there's still plenty to buy. That includes Apple (AAPL) , Micron (MU) - upgraded today by UBS -- Skyworks (SWKS) , and most important, Starbucks (SBUX) which had fabulous numbers but couldn't give a forecast because of China. I really like the latter because it is solving the airport line problem, a gigantic business that needed competition among weaker Starbucks and is getting them. You want to roll the dice you buy the two Macau casinos, Wynn (WYNN) and Las Vegas Sands (LVS) , which were both upgraded today by Bank of America, citing waning health risk. I still wouldn't pick up a pair of dice after they've been blown on at the craps tables.
I am not a huge fan of this On China trade, but I recognize that when you consider the comparison to the U.S., we've got a highly contagious novel flu that's not as bad as a highly contagious winter flu and both will die down when it gets warm.
It's too bad that the president gave props to MAGA, Microsoft (MSFT) , Amazon (AMZN) , Alphabet (GOOGL) and Apple but only one of those, the latter, is a China play. The rest are stalled, not because of the news of an FTC action, which will go nowhere, but because they have no China in a market where there is thirst for the tamer novel flu. But have no fear, the devoid of China Facebook (FB) is back rallying, as I expected.
Now how about our election in New Hampshire. Bernie wins, Mayor Pete comes in second and Klobuchar third, just enough disarray to make Wall Street more confident of a Trump win, and as I always say, hate him or like him, he's fabulous for the stock market which he has always regarded as his presidential Nielsen's.
Plus, prominent Wall Streeters are openly scornful of Bernie. My friend Lloyd Blankfein, former CEO of Goldman (GS) , expressed the thesis straight up with this now legendary tweet from this morning: "If Dems go on to nominate Sanders, the Russians will have to reconsider who to work for to best screw up the U.S. Sanders is just as polarizing as Trump AND he'll ruin our economy and doesn't care about our military. If I'm Russian, I go with Sanders this time around."
I think that pretty much sums up the prevailing view that if nominated Sanders will lose and that's all you need to know. He's as openly loathed among the wealthy as he loathes them himself. There's only one problem: while there aren't a lot of billionaires or even multi-millionaires their money speaks loudly, as it sure has with former Mayor Michael Bloomberg and with President Trump.
The market speaks loudly on this issue. United Health (UNH) , Humana (HUM) and Centene (CNC) were among the biggest winners today. They wouldn't even exist under Sanders. If you believe in this theory then you want to buy CVS (CVS) which owns Aetna and was down today after reporting a very good quarter but not good enough given that it has ran ahead of the print.
One thing this market does not lack is confidence. There is confidence that the Chinese have gotten control of the virus and made it less novel. There is confidence that the factories will open. There is confidence that tourism will come right back. There is confidence that investors will see through the weak corona quarter and buy now because there has been so much stimulus. There is confidence there will be a vaccine within the next few months. And there is an amazing confidence that President Trump can crush any Democrat especially because Bernie doesn't have the votes to win and if anyone else gets the nomination his people won't cross over.
Can everything pan out? I only have one conclusion: if you haven't, get your darned flu shot. Most of those who have gotten sick wouldn't have, which is a heck of a lot more sad than what's happening in the Peoples Republic of China.
(Apple, Starbucks, Microsoft, Amazon, Alphabet, Facebook, Goldman Sachs and CVS 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.)
