Now we just need some customers. I know there is a propensity to buy many of the down and out stocks, better that they will come roaring back as the economy picks up. Are people really going to go to Kohl's (KSS) now that they discovered that Amazon (AMZN) has everything Kohl's has except for some private label clothes. Did PVH (PVH) just start selling more Tommy Hilfiger and Calvin Klein? Will Caterpillar (CAT) start getting some big construction orders? Will planes and hotels soon be filled?
The answer for all of these is something that I don't like: the stocks are so cheap it doesn't matter.
Stocks are cheap for a couple of reasons. One was and is the shelter at home sentence that eliminated a lot of business, except that from Amazon.
Second, there's been a ton of money from the Fed and Treasury to keep unemployment benefits high, to put money in peoples' pockets, and bail out companies that otherwise wouldn't get financing by, basically, stopgapping the selling at ridiculous levels for certainly good companies that would otherwise go out of business through no fault of their own. And there's PPP which ostensibly put money in workers' pockets but really was a great way to try to convince small companies to stay open.
There's only one little problem: We are in a recession and in a recession people spend less. They don't have enough money. Right now the Fed is boosting the money supply to unheard of levels. That can't stay in that posture. It would be reckless.
But the extra $600 a week benefits will need to be extended because many of the kinds of businesses they may have been working at can't make it in this new world. Fortunately, we were doing so well before the pandemic that you could have fewer retail and restaurants, and perhaps people who wanted a job can still find one.
However, I think that's way too optimistic a view. We don't know how many of those 30 million were just waiting for their employers to hire them back. But the recession has brought a flourish in e-commerce, not storefront.
Now I do share in the green on the network's wall. That, alone might spur more investment. That's why I'm so glad to see it.
I just don't think when this era is over we will have enough jobs to go around and the money will be spent. Meanwhile, the restaurants have gone under in record number with the millions employed in those lower skilled jobs fighting for whatever they can get, including helping in what turns out to be a very strong take out and delivery business.
The restaurants will not be able to make it without that money.
Unless, and this is the big unless, we get a vaccine lightning fast. Then all bets are off and we just try to make up for a couple of months lost.
That's what really driving today. The thought that one of these more than 100 attempts to tame Covid-19 pays off. I say don't hold your breath. And remember without customers an open store or restaurant doesn't mean a thing.
(Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now.)
