Thursday markets: Trump-Santa Claus Rally takes a breather

Biotechs, pharmaceutical stocks continue to get hit after Trump remarks, but banks and financials, materials, oil patch all party on in Thursday Wall Street action.

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Trump-Santa Claus Rally continues on Wall Street. (Image via Pixabay, CC 0.0)

WASHINGTON, December 8, 2016 – The Maven has been down and out with various ailments this week. But he’s returning to the fray today because… well, because this post-Election 2016 Donald Trump-Santa Claus Rally market is just too much fun to miss.

Like Wednesday’s massive rally, spurred on, allegedly, by a big noon-hour buying program that kicked lackluster morning trading into high gear in the afternoon as the Dow closed up nearly 300 points in its best rally in quite a long time. Banks, financials, materials and at least some stocks in the oil patch continued to shine.

Biotechs and pharmaceuticals took a hit Thursday, however, missing out on the rally entirely. While President-elect The Donald has put a floor underneath many stock sectors, particularly energy companies, he kicked the drug stocks squarely in the pants Thursday by attacking the same high-pricing habits his electoral opponent also opposed.


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This hurt one of our major positions in that area to be sure. But it’s time both drug corporations, commercial hospital companies and health insurance companies alike take their lumps for having colluded—behind the scenes of course—in putting together the Obamacare disaster most Americans have despised since ACA was passed by Congressional Democrats only in 2010.

There were goodies in this package for these sectors, which, of course, were only too happy to provide support for socialized medicine so long as their own capitalist need for profits was taken care of. It was crony capitalism of the highest order. But, as Republicans always predicted, the whole mess has failed utterly.

The failure, however, was a feature, not a bug, as the Obama-Pelosi-Reid plan all along was to game its greedy corporate partners, leading to a failed program that would “force” the government to take over the entire health sector with a single payer—i.e., the Federal government-only plan: socialized medicine for the Deplorable Masses.

Problem is, this failure was cleverly timed to coincide with a Hillary Clinton administration, which would, of course, dutifully complete its appointed rounds and finish “socializing” ¼ of the U.S. economy, just the way Europe has with its various failed national medical plans. That scenario didn’t work out, however. America’s Basket of Deplorables gradually voted out pretty much everyone who’d engineered this massive cause of ongoing middle-class misery.

Hence, the attack on the pharmaceutical and medical industries now. The cat is out of the bag. Everyone knows who colluded to put the Obamacare disaster in motion. And they’re elected as president a businessman who at least has promised to get rid of most if not all of the Obamacare monster. The companies involved, particularly the pharmas and biotechs, are currently paying the price.

The whole scenario is sad, really. The Maven has long endorsed the pharmaceutical sector, whose innovative (albeit expensive) parade of new drugs and treatments have, in fact, significantly reduced the considerable expense involved in an array of surgical procedures, many of which are now being headed off at the pass by new drug solutions.

But that’s the way it goes when you’re too willing to accept Federal government payoffs without looking at what’s going on behind the curtain. “Shortsighted” is a word that describes most of America’s CEOs today.

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Stocks are taking a pause Thursday, given the magnitude of Wednesday’s rally, with the Dow and the NASDAQ currently (11 a.m. EST) up fractionally, while the S&P 500 is virtually flatlining. We may get more of the same Friday, as it takes a day or three to digest a big move like we had Wednesday.

But unless something horrendous happens between now and Christmas Day, we look for the Trump-Santa Claus Rally to continue at least furtively, spurting ahead nicely for a day or two and then going sideways briefly to digest each substantial move.

After the first of January, 2017, things could change. But right now, it looks like investors are redeveloping a long-forgotten affection for common stocks, particularly in the growth, materials, and energy and banking sectors. For long-beleaguered individual investors, that’s perhaps the best Christmas present of all.

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