Wishful thinking? Or a replay of the 1999-2000 dot com bomb?
How about neither.
How about the two markets I keep describing. The right one, the one most responsible from what may be a truly historic run from the red to the black, which is what's happening in the Nasdaq, yes it's almost up for the year, and the wrong one, the industrial, travel and leisure economy which even gets dinged on big up days like today.
There is genuine excitement, understandably, that there is a return to some sort of working normalcy. The economy is opening up. Not all at once, but some incredibly important areas that matter. The unemployment is incredibly high. But people got their stimulus checks, or are getting them, and that's fueling spending. So are the Paycheck Protection Program's checks. People in various states are actually going out for dinner, and while the rules are a little unbelievable for the restaurateur - more on that later - there's something to do for those cooped up consumers.
But that's not really what's at stake. Today I heard for the first time that we might be on the path of China. I know the PRC is easy to hate. The president bashes them every day and the administration is constantly, in one form or another, blaming the Chinese for not filling us in or for creating the virus for exporting it globally.
The fact is, though, that even as China was ravaged by the illness, it did come back, there is great growth now and there's a possibility, if there are no outbreaks, it could be a blueprint for us. Maybe we are only three or four months behind them. I am well aware that Dr. Fauci, who pretty much everyone trusts, isn't putting that word out. In fact, it's the opposite. He's expecting a lull in the disease and then a full blast of it in the fall.
We don't know who opens for business first. But one thing's for certain: this is the first time we have had a health care recession: doctors and dentists across the country have had to close their offices and hospitals have only been able to focus on Covid.
I think this opening is the beginning of the end of the health care recession. You know how you can tell? Watch the stock of AbbVie (ABBV) which is about to close on the purchase of Allergan (AGN) . Wall Street loved this deal originally but then Covid kyboshed the best reason to own the company: Botox. The private pay business of looking good had been shelved. Not now, though. Not with the reopening.
Dermatologists, who know how to wear masks and gowns, are opening for business and the pent-up demand for botox is incredible, as predicted by CEO Richard Gonzalez on his excellent but ridiculously ignored conference call.
We know that the pre-Covid rage for looking good came from selfies, the selfie-generation. Now, as Fabrizio Freda, the genius CEO of Estee Lauder (EL) told us, we are in the Zoom generation, 300 million strong, and holy cow can you look bad in Zoom (ZM) . I emcee'd the American Brain Foundation's virtual awards ceremony last week, where I received the Ambassador Award for Migraine Advocacy, and I was stunned to have to look at myself for two hours. Get me to the dermatologist for heaven's sakes. Fabrizio's so right, the Zoom generation demands more than just make-up though. That's how punishing your portrait is.
We know if the economy's open you have a reason to drive somewhere. If you drive somewhere you use gasoline. Remember when we did a no huddle two weeks ago saying it was time to buy the oils, the one I was ridiculed for on Twitter (TWTR) ? The run's been so sustained that I think you need to be a little careful but I am still with Chevron (CVX) , even up here. Great quarter. Great dividend.
But what's really driving the market, what's making the Nasdaq roar? Tech and science, that's what. They've been some sort of unstoppable force in the last couple of days and we have to dissect it to know why, of course using earnings reports to ferret things out.
Today tech turned positive and if you want to know why look no further than the amazing quarter from Skyworks Solutions (SWKS) , a fantastic semiconductor company run by Liam Griffin. Skyworks is seeing some fantastic strength from all sorts of applications including wireless infrastructure, Internet of Things, automotive, machine to machine, and medical applications.
The stunner though: all of the orders for handset builders for 5G parts that Skyworks makes. He gave a long list of customers who are ordering like crazy. If you do business with Apple (AAPL) you aren't supposed to talk about it, yeah, like Fight Club, but I have to believe Apple's in there ordering big, too. I think Apple's strength today is directly related to the Skyworks commentary. You know how Estee Lauder's Freda said we are in the Zoom generation? We all love our zoom. But can we just admit that the herky jerky nature, the freezing, is repulsive and unnerving?
Guess what? Three hundred million people just discovered why we need 5G and need it now. Skyworks is going to give it to us.
The insatiable demand for tech of all sorts, Griffin points out, is occurring despite and because of Covid as work from home has required the same sophisticated set-ups that you have at the office, chock full of semis.
Science is driving the rest of the Nasdaq. I know that Pfizer (PFE) started human clinical trials for Covid. But I think that the news out of Regeneron (REGN) about a two-pronged approach, a novel antibody cocktail ready for trials in June and an off-the-shelf moonshot, rheumatoid arthritis drug ignited a lot more than just Regeneron. They ignited a hope that's far more reasonable to be on the scene than a vaccine.
Remember, we want to lick the disease any way we can, whether it means stopping it when it is in you or stopping the attack in the first place. Regeneron was up 34 points for a variety of reasons, not just Covid, surprising strength in drugs new - its anti-cholesterol drug, old, its eye care franchise, and its soon to be extraordinary oncological pipeline. But its Covid drugs are driving the excitement. When one big biotech hits it out of the park the group, so joined at the knee by ETFs, moves up the entire group.
Away from medical we saw the usual reaffirmation of how people shop with a monster set of numbers from on-line furniture company Wayfair (W) . What a wake-up call for Amazon (AMZN) , Etsy (ETSY) and PayPal (PYPL) , all on-line stalwarts.
Remember, though, we have two markets. The banks? Once again barely hanging in there. Declines in many brick and mortar stores. A dividend slash from giant container board company, WestRock (WRK) , a once promising way to play e-commerce. And declines in everything aerospace.
What's amazing is that there are so many things happening in science and technology that you can't see the pain in travel, leisure, banking and industrials, and retail and restaurants. Do those stocks of which there are a myriad in the S&P 500 not matter? On days like today?
Yes. Not one bit. Not at all.