WASHINGTON – The international Wuhan coronavirus panic has hit the US stock market far harder than individual Americans thus far. Thursday’s miserable trading climate was pure coronavirus panic. Friday futures looked better. But then, a second US coronavirus case showed up in Chicago. And then a third, in… Oh, wait! That was only Connecticut’s cretinous Senator Dick Blumenthal pitching fake coronavirus news, say the Tylers of ZeroHedge.
Dicky Blumenthal does it again with his fake coronavirus news
“A senator has reportedly told the press that the CDC is about to confirm a third case of coronavirus in the US. Unsurprisingly, stocks aren’t taking the news too well.
“That Senator has been revealed to be none other than Connecticut’s Dick Blumenthal, a lawmaker with such a reputation for vanity, that it’s hardly a surprise that he would murder stocks for his own political gain.
“Following the briefing from health officials, Bloomy said the US needs ‘better relations with the Chinese’ to help deal with the epidemic, a indirect slight at Trump.”
A Cathedral of Lies
Scumbags like fake Vietnam hero Blumenthal never miss the opportunity to contribute another stone to the Democrats’ rising Cathedral of Anti-Trump Lies. This party’s only contribution to America’s wellbeing over the past 3 years has been their unwavering opposition to all things Trump. And what have they accomplished there, besides getting in the way of Making America (Even) Greater?
Why don’t we just re-label the Democrat Party the CPUSA? Seems like they’re one and the same. Stating that profoundly simple truth could clear up a lot of the political miasma hanging over Foggy Bottom these days. Having failed in all their other #NeverTrump gambits, and on the glide path to an extended segment in a FailArmy video (for their current impeachment farce), this psychotic party should just retitle itself in an openly Marxist fashion. Then, squishy “independent” voters could get a better handle on logic and reality this fall and either vote GOP or stay home.
The left keeps talking stocks down. The coronavirus scare is not a crisis they want to waste
Nonsense like the Blumenthal Fake Coronavirus News caper is likely part of the next backup stunt the
Democrats CPUSA have lined up next, after mounting the weakest impeachment case forever. Their latest backup insurance plan actually got underway in 2019. It’s called “talking the market down until we convince so many people to sell their investments so we’ll actually get the big recession we’ve predicted for the last 3 years.” Unsurprisingly, Blumenthal just made the most recent contribution to the current episode.
Reality tells us we’ll undoubtedly face many more coronavirus cases here before this current SARS-like bug runs its course and takes a number of lives. So why yell “Fire!” in a crowded theater, Dicky? A little seriousness about this might actually help. But that doesn’t matter, does it? Particularly when you can score political points.
Markets behaving badly on Friday
Blumenthal Fake Coronavirus news or not, US markets continue behaving badly as we write this, around 2 p.m. ET Friday. Based on the new Chicago coronavirus case, stocks traded down nearly 200 points earlier in the day before they began to recover. But then, Blumenthal lobbed his fake coronavirus Molotov cocktail into the fray, and BANG!
“Stocks turned negative on Friday, giving back their gains from earlier in the day after the second U.S. case of the deadly coronavirus was confirmed.
“The Dow Jones Industrial Average traded down 13 points after jumping more than 100 points earlier in the day. The S&P 500 was down 0.2% after rising 0.2%. The Nasdaq Composite chopped around the flatline.
“On Friday, the Centers for Disease Control and Prevention said a Chicago resident who traveled to Wuhan — the Chinese city where the coronavirus originated — in December was diagnosed with the sickness.”
Travel-related stocks get hit by the coronavirus panic, too
Banks, gambling stocks and travel stocks got hit again, just like they did on Thursday.
“Shares of United Airlines and American both fell more than 3%. Las Vegas Sands and Wynn Resorts also dropped more than 2% each. Treasury yields fell, pushing back shares lower. The benchmark 10-year yield traded below 1.7%. JPMorgan Chase, Citigroup and Bank of America all traded more than 1% lower.”
“Fears over the possible economic impact of the coronavirus subdued stocks this week. The Dow and S&P 500 are both on pace for their first weekly loss of 2020. The Nasdaq was set to post a marginal gain for the week. The World Health Organization on Thursday called the outbreak an ‘emergency in China,’ but stopped short of saying it constituted a global public health emergency.”
Right now, we’re down 250 Dow points and sinking. Admittedly, the daily battering of Boeing (trading symbol: BA) stock hasn’t given that average much help of late either..
Coronavirus pin action spreads beyond the obvious sectors
The baffling thing for me is that the coronavirus pin action is spreading to other stock sectors aside from the obvious ones, like banks, casinos, oil and gas, hotels and the like. All these would suffer if this unfolding epidemic / pandemic really takes hold around the world outside of China.
But that said, for the second day in a row, pharmaceutical stocks are getting hammered. Why? Wouldn’t these guys be the ones to make lots of money by discovering some workable coronavirus drug or remedy? Maybe it’s just a matter of earnings days approaching soon for these stocks.
Dumping Abbvie, handing on to Bristol-Myers Squibb
Whatever the case, most of the world’s perpetually profitable pharma giants continued to get stomped Friday. As one result, I reluctantly decided to dump my position in Abbvie (ABBV) today. The shares have gone down too hard and too fast this week, so I exited, stage right. But happily, I still walked off with a better than average profit.
Unfortunately, I’m now having to look at an even better and more profitable situation in Bristol-Myers Squibb (BMY). Sellers continue to beat this one almost as badly as Abbvie, although the company’s prospects remain far better with its brilliant acquisition of Celgene. No matter. Let’s shoot them all, just because.
What’s going on here? Perhaps the coronavirus scare can prove just the catalyst this overbought market needs to call in an overdue correction. I’ve been finding fewer and fewer reasons to acquire any stock at current prices because they’re all priced for the kind of perfection we aren’t likely to see this year. So a pandemic panic, real or fake, might work as a catalyst for this as well as anything else.
McClellan Oscillator tells a familiar tale…
My favorite forward indicator, the McClellan Oscillator, after looking exhausted on the upside for a few days sank below the dreaded zero line on Thursday, often predictive of some kind of correction.
…and so does the VIX
Likewise, we got a companion move in the VIX volatility index, which closed in the neighborhood of 14 on the scale. This indicated a reversal of last week’s bullishness.
If the VIX keeps going this way, bulls should get nervous if the VIX crosses above 16 on the scale. I expect we’ll see this happen by COB today unless a miracle occurs.
Look out below (?)
If the impeachment farce drags on and if we keep getting coronavirus hits via the newswires, fake or real, we’re going down again next week. So we need to look at which stocks to hold through the storm and which ones to dump. And buy back later at a better price.
Have a good weekend, and we’ll rejoin our battle with Mr Market next week. Hopefully sans more fake coronavirus news and additional bloviating from Dicky Blumenthal.
– Headline image: Wile E. Coyote (and Wall Street) look like they’re in trouble again.
(Fair use, satirical rework of Wile E. Coyote YouTube clip. Character copyright: Warner Brothers.)