WASHINGTON – US stocks were ripe for at least a momentary correction after the torrid, bullish action that’s dominated January’s trading action. And that’s what they got today. Markets opened weak this Tuesday morning after having the day off for Monday’s MLK Day holiday. Then they began a steady sinking spell that accelerated around the noon hour. Alarming headlines proclaimed that China’s alarming yet mysterious coronavirus outbreak had suddenly arrived in Seattle, like a significantly worse version of the gypsy moth or the emerald ash borer. Vacation and travel stocks promptly tanked. Indeed, who wants to go anywhere where they might run into a fatal coronavirus?
Coronavirus scare hits, travel stocks pummelled
The instantaneous whackage sustained by Mr Market was unmistakable. The pin action from the horror ignited by the spreading coronavirus news promptly spread well beyond the initial panic in the travel and leisure sector of the market, as CNBC duly noted.
“Stocks pulled back from record levels on Tuesday after the Centers for Disease Control told Reuters that a traveler from China was diagnosed with the first U.S. case of coronavirus in Seattle.
“The Dow Jones Industrial Average fell 149 points, or 0.5%. The S&P 500 slid 0.3% along with the Nasdaq Composite.”
“Shares of casino and hotel companies Wynn Resorts and Las Vegas Sands fell more than 6% and 5%, respectively, amid fears that the coronavirus outbreak in China would dent international travel.
“Airline stocks hit their lows of the day following the news. United Airlines and Delta Air Lines both plunged more than 5%. Shares of Southwest and American Airlines were down 3% and 4.3%, respectively.”
ZeroHedge blows the warning trumpet call on travel stocks. And Boeing
ZeroHedge jumped on the selling jampile pounding the vacation and travel stocks. The Twin Tylers duly noted an adjacent but somewhat related move that hit the Dow. Hard.
“Boeing shares slide 2% as a new report from CNBC indicates that the 737 Max sign off won’t happen until July. Shares hit a 52-week at the 315-handle and risk further downside to the 300 level as delays continue to mount.”
Beleaguered Boeing (trading symbol: BA) has had enough problems with its ill-fated 737 MAX. Now it’s getting tarred by the coronavirus panic, helping to drag the Dow down hard Tuesday by adding, somehow, to the woes already anticipated by the travel stocks and their leisure stock counterparts.
Markets already on edge anyway. Because impeachment kabuki
Moving beyond hard hit travel stocks, markets in general were already on edge Tuesday, given the accumulation of additional scary headline possibilities. Like the Trump impeachment trial that formally launched in the US Senate Tuesday morning. Watch for the media to focus on the latest act in Capitol Hill’s fake kabuki theater to the exclusion of all else. We’ll all have to glean actual news from more reliable online sources like the Examiner, Daily Caller and others.
Actual news won’t be a focus on Commie Cable channels. And as for impeachment, it ain’t over ‘til it’s over. Which will be precisely never if Pelosi, Auntie Maxine and their Polident Gang of not-OK Boomers have any say in the matter. These morons will eventually launch another “impeachment inquiry.” Wait and see. The Russia-Ukraine “collusion” fable seems to spread more rapidly in The Swam than the coronavirus did in the People’s Republic of China.
And this is a problem for markets going forward. To the extent that President Trump can keep his economic juggernaut going in 2020, his message of real “hope and change” will be lost to the voting masses who mainly depend on cable for their fake news. We’ll just have to see how this works out, but the effect could be quite negative on Mr Market.
Oops! It’s earnings season, too
Ditto another big fear that’s hitting the tape: We’re well into earnings season now. And if big stocks like Netflix (trading symbol: NFLX) disappoint, it’ll be time to roll out our shorts. Big time. Once ignited, this potential selling panic could quickly infect US and world stock markets just like a virtual coronavirus.
And, OMG, it’s another
Global Warming Climate Change festival in Davos!
Another complicating factor: The craptastic news we’ll be forced to endure from the annual Davos conference, during which legions of mega-wealthy, fake socialists fly in from around the world, mostly via private jets, to weep and gnash teeth over the proles who won’t take
global warming climate change seriously. And they’ll gather en masse once again for another manic tongue-lashing from St Greta the Great and Powerful of Sweden. She’s almost certaily subsidized, BTW, by that wealthier yet equally Great and Powerful Globalist, George Soros.
The “we’re all gonna die” insanity we’ll hear all week from the Davos crowd will also have a negative effect on stocks, just like all the other puffed up headlines we’ll see.
Get your shorts ready. Some kind of correction may be on the way
Yeah, it’s going to be a wild and crazy, headline-driven, coronavirus infected market this week. If the stampede gets out of control, we’ll need to bail out of quite a few still massively profitable positions. And we’ll need to bail before the clowns take all the middle-class 401(k) and IRA gains from 2019 away. So I, for one, have my finger on the (metaphorical) trigger. You never know.
Meanwhile, out of the corner of our metaphorical eye, let’s watch the fake impeachment nonsense. About as many seriously smart and important people in the media and elsewhere believe Trump has a 95% or better chance of completing his term after his fake impeachment as believed roughly the same percentage of the same people that Hillary would be our next president on Election Night 2016. And we know how that turned out.
What I’m trying to say is, we all need to remain skeptical. At least until the #NeverTrumpers fail, by a long shot, to convict Trump of whatever fictional high crimes and misdemeanors the House Democrat fabulists claim he committed. And since nonstop farce is what seems to play best in The Swamp, no one should crow – in advance – about Trump’s ability to beat the fake rap. As they did before the crowning of Her Magnificence, Hillary Clinton, the next glorious Democrat POTUS.
This market remains highly distracted by media and politics. For that reason, it can panic in less than a New York Minute. Worse, stocks are seriously ready for some kind of pullback. I’d prefer an orderly one, not a 1987 or 2007-2009 style rout.