When you talk to people about this market, they almost all say the same thing: With employment about to spike to unheard of levels -- maybe the 47 million people number often bandied about, so call it 32% unemployment -- stocks will collapse upon their own weight. The idea that we could have a gross domestic product crash of those proportions -- negative 25% says Morgan Stanley -- makes a mockery of any up day.
In fact, when I spoke to a bunch of managers over the weekend (tell me what else there is to do without sports or your family) they were glued to their machines on Sunday night to see how much the stock futures would be down, especially because the president dashed the April 12 "America's open for business" rap, for something more in keeping with what Dr. Anthony Fauci wanted, a lockdown until the end of April. How can we possibly shut down America and have a rally?
The answer is, pretty easily, that's how. We rallied because science is in play. Not just bending the curve, but actual science.
Look we all want the curve bent. In fact I have an actual wish list. First, I favor a national lockdown. I know that's hard for us. We are a free society and a national lockdown is an anathema to us. But you are not going to get the curve to bend if you have people gallivanting like nothing's wrong. You have too many youths out there doing stupid things, catching it and spreading it to their parents and grandparents. More than 1,200 people have died in New York and they got it from someone. New York City's a travesty. Not even a month ago, the mayor's people actually had encouraged New Yorkers to go out. Yeah, we're tough. But not tough enough. Not against something we have no immunity from. Shelter in place nationally would make a huge difference. It's not happening.
Second, I want a national travel ban except by medical professionals. It's true that traffic has dropped precipitously. We want people to stay in place. Travel is antithetical to that.
Third, we have got to solve this mask conundrum. On Friday, I spoke with the CEO of Owens & Minor (OMI) on"Mad Money" and he talked about the need for 200,000 to 300,000 masks from hospitals that were ordering 20,000 before this. The president's take was that the hospitals are doing something nefarious with them masks because the orders were so huge. I'm thinking that Ed Pesicka meant that the spike in demand comes from the need to constantly change, because it is so contagious. I think we need one billion masks and gowns, however it takes and whoever it takes, to make them. And if they were made in China, we will take them. Let's not stop until we get a billion masks -- and let's throw in gowns, too. Who can bear the wearing of garbage bags by our amazing public health responders? We are the United States of America for heaven's sake.
Fourth we need national virus testing and national antibody testing. We have Abbott Labs on "Mad Money" on Monday night, and it has a five-minute test for Covid-19. Maybe that's what could put us ahead of this thing. If you could see not only who has it, but who had it, we can begin to open our economy.
Fifth, to get is through until we lick this thing, we need a 90-day pledge from big business that it will not lay off workers. It's a tough nut: Macy's (M) furloughed some 130,000 employees. We need other businesses to counteract that.
That's a wish list, but wishes don't usually come true. Then how can you explain the countertrend rally vs. Friday and what we expected last night when we heard some daunting numbers if things didn't start going right?
I have said from the very beginning that there is only one way out of the possibility of a depression from this incredibly virulent disease: science. In the last 24 hours, we have had some really serious go-aheads when it comes to antivirals, meaning once people are infected it can save their lives.
First the hydroxychloroquine got emergency approval from the Food and Drug Administration. There are some unvalidated studies that this anti-malarial drug, when combined with the azithromycin, can stop the disease -- maybe even in its tracks. The president is very hopeful about this combination. I am on the opinion that things are bad -- so let's just give it a try, provided that we check to see if a pre-existing heart condition might trigger an episode that's more dangerous than Covid-19.
Next, Monday morning, Alex Gorsky, the CEO of Johnson & Johnson (JNJ) talked about how his company is developing a vaccine that could be available early next year. The best part about it? The scale: He's talking a billion doses. Yes that means we can't avert the 25% GDP decline -- but it gives us hope for next year.
But don't rule out something else. I have a somewhat positive view of some of the attempts that Roche has going including one using an off-the-shelf technology, Activase, which works against strokes, and could work against blood clots in the lungs. The other, and the most promising? The work Regeneron (REGN) is doing with monoclonal antibodies directly targeted against Covid-19. Regeneron may be our best hope to crush the naysayers and put our people to work again. We can also hope that perhaps Gilead's (GILD) got something worth mass trials, although it does have the drawback of being for another illness, which makes me skeptical.
The clock is ticking. I know that the $2.2 trillion will help millions of working people get through the next month. The provisions that allow employers to get loan forgiveness, if they keep their employees on the rolls, is genius.
But we need insurance. We need to think of something big to help working people and help health care workers. We need a $500 billion, 30 year treasury Covid "war" bond that would bridge us to where we get results from something that's in the works. We can't afford to have such a decline in economic activity and still remain the great power that we are. It's too big a hit. We need the spare capital from the Covid war bond to be able to target industries that are simply falling apart in this service-based economy,
I know I am starting to hear about something that was a big whiff under President Obama's stimulus plan: shovel-ready projects. We simply cannot go down that path. We can't get those projects up and running and they don't take a lot of people. They are a total waste of money, because they are disorganized and haphazard.
What we want is testing, testing and more testing, so we know who is healthy and we know who has had it and didn't even know it and who is done shedding -- what an awful term -- and can go back to work. In the end, the way to defeat this thing is to stay at home, get tested when you don't feel well, or didn't feel well, maintain physical distance and wash your hands. That won't get people hired, but it sure might not get you fired.
I think it's bleak. At times, myself, a natural optimist, feel bleak, separated from my wife and a 28-year-old daughter, an English teacher who is stuck in Madrid of all places, trying not to catch the darning thing, watching or health care system blow up right before our eyes. I want to see that JNJ vaccine. I want to see people walking out of those hospitals. I want the death rates in Europe to slowdown. I want garments, ventilators, everything else just like you.
Today the market says we could be on to something. Unfortunately, tomorrow's another day.