I told you this was coming last week (see: "Record High Wednesday – Dow 30,000 in Sight") and we touched it this morning in the Futures (/YM) as Moderna (MRNA) announced that they have a 95% effective Covid vaccine that, unlike Pfizer's, requires only normal refrigeration. That's punching MRNA up 20% in pre-market action and sending the indexes flying higher as two vaccines are better than one so why not double down on our longs?
Well, as I mentioned last week, 30,000 on the Dow is 40 TIMES the earnings of its components and that does seem a tad high, doesn't it? Also this weekend, Biden's Covid Task Force said they don't think a Nationwide lockdown will be necessary while Trump's Covide Task Force said they haven't seen the President at a meeting in over 3 months.
We are hitting 11M cases in the US today and will have our 250,000th death this week as well. Gosh, it seems like only last week that we hit 10M cases, doesn't it? Well, actually, that was last Tuesday: "Ten Million Infections Tuesday – Just in Case You Forgot About the Pandemic…" While the markets are singing "Don't worry, be happy" Washington and Michigan are imposing stricter restrictions and ending indoor dining in those states as infection rates have doubled in the past 30 days
In addition to stopping indoor service at restaurants and bars, and restricting outdoor dining to tables of five people, indoor operations were halted at gyms, bowling alleys, museums, zoos, aquariums and movie theaters, while religious services are limited to 25% of indoor capacity or 200 people, whichever is less. Weddings and funerals can take place, but indoor receptions of any size are prohibited. Michigan stopped in-person classes for High Schools and Colleges but we're still sending our younger children off to infect each other for some reason.
I live in Florida, where we are partying like it's 1999 and, yesterday, we had dinner at Benny's on the Beach (love it!) so we could watch the Space X Dragon Rocket take off for the International Space Station and I've got to tell you that, between seeing this private enterprise space venture and hearing about another vaccine for a virus we never heard of less than a year ago – we are capable of doing some really amazing things. It does give me hope for the future, frankly – we just need to survive the present!
Anyway, the restaurant was packed, there are no empty tables and, since the restaurant is on a pier, there's really no social distancing going on there and, apparently, they were so busy all day long that most of the shellfish was sold out by the time we got there. No one was wearing a mask at the beach, maybe 1/3 of the people walking around the restaurant were wearing masks and Florida (just Florida) had 9,928 infections on Saturday.
What are we, lemmings?
The game of life is hard to play
I'm gonna lose it anyway
The losing card I'll someday lay
So this is all I have to say.
That suicide is painless
It brings on many changes – theme from MASH
Gee, the two-week trend is +81.6% – not worth worrying about, right? You do start to feel silly for worrying when no one else is, right? This is not like our summer surge, this is going up – like a rocket and, for some reason, the idiots on TV this weekend mostly think it will just level off but that's not going to happen until they actually start distributing the vaccine (March) or impose proper lockdown restrictions (never) or the virus manages to infect over 50% of the population, at which point half the people develop (hopefully) herd immunity.
But we can't get there if only 10% of the herd has had the virus so far. That's 40-50% more people to be infected along the way and which Million of us is going to die while we wait for the virus to burn out? Certainly not the wealthy – a $100,000 treatment fixed Donald Trump right up – he was back to work in 3 days! Only poor people die from viruses – which is why the GOP doesn't take it seriously….
The Social Policy Institute (SPI) at Washington University in St. Louis found that liquid assets increased the likelihood that an individual could practice social distancing. However, Black individuals were least likely to afford social distancing. "Social distancing is a privilege that comes with resources and wealth, but wealth is not distributed equally in America," said Michal Grinstein-Weiss, the Shanti K. Khinduka Distinguished Professor and director of the SPI. "Wealth gives individuals agency to make choices, like social distancing, that keep themselves and their families healthy."
Survey respondents also revealed other significant loss and hardships as a result of the pandemic. The survey found that:
- Low- and moderate-income households delayed major housing payments and health care;
- Hispanic/Latinx homeowners were more than twice as likely (14.1%) to be evicted than Non-Hispanic White (6.4%) and five times as likely as Non-Hispanic Black (2.6%) homeowners, despite moratoriums on some evictions;
- Hispanic/Latinx (27%) and low-income individuals (29%) were most affected by job loss;
- One in three gig workers reported working less as a result of the pandemic, and 86% of those individuals said gig income was essential or important to their household budget; and
- 34% of people who lost their job reported food insecurity.
Of course the good thing is that non-white Americans only own about 13% of the total wealth of this nation so, if that part of the economy is suffering – it won't have much effect on the overall economy and, therefore, why would we want to do anything about it – especially if it inconveniences us, right?
It's going to be a great Thanksgiving this year, isn't it?
Thanksgiving is a week from Thursday and this week is wall-to-wall Fed Speak with 21 Fed Speeches scheduled – a new record! Why are the speaking EVERY SINGLE DAY this week? Probably because we're goijng to get some very bad economic news and they feel the need to keep us distracted. We have Empire State Manufacturing today, Retail Sales and Industrial Production on Tuesday, Housing Startes Wednesday and a 20-year bond auction – that might be it. Thursday is the Philly and KC Fed Reports and Leading Economic Indicators and nothing on Friday – it's got to be the bond auction…
Maybe the Fed is just trying to convince us that all is well and we should embrace and love Dow 30,000 and the 40x valuation that goes with it. What a week it's going to be…