Maskerade party finally over in the US? Wall Street yawns, stocks droop
WASHINGTON – At least as of 1 p.m., it’s been a nothing Tuesday on Wall Street thus far. Taking another thus far minor pause in an ongoing rally that’s getting long of tooth, all three major averages are off 0.25% or less, as investors await further quarterly numbers from a host of big US companies. But perhaps this long-overdue Covid update, just posted via Fox News, will brighten traders’ spirits, at least a bit. At least for those who are increasingly sick of the ceaseless and generally useless ‘maskerade’ party run by the CDC.
Rochelle Walensky calls a halt to America’s long maskerade party nightmare. Sort of…
“The Centers for Disease Control and Prevention (CDC) has updated mask guidance for people who are fully vaccinated against the novel coronavirus. In a White House COVID-19 briefing on Tuesday, Dr. Rochelle Walensky, director of the CDC, said science shows there are ‘many situations’ where fully vaccinated people do not need to wear a mask, ‘particularly if they are outdoors.’”
Great news! Thanks Rochelle! BTW, are you the same Rochelle who shed crocodile tears over the pandemic and the maskerade scofflaws just a couple of weeks back? Never mind. A foolish consistency is the hobgoblin of little minds. If anything, the CDC info machine is a movable feast anyway, just like the propaganda mill of its pals over at the Chinese-run WHO.
Good news on other fronts, but Tuesday market action remains disappointing for the bulls
Whatever the current state of America’s maskininity, we continue to get good economic news from corporate America. Q1 numbers generally continue to impress during the current “earnings season” and jobless claims continue to drop in excess of analysts’ “consensus estimates.” In fact, with jobless claims falling to 547,000 in the government’s most recent report, this number is now at the lowest level since March 2020, the month our current overextended and overhyped pandemic panic began. Maybe America’s workers actually stopped their maskarade party months ago, without telling.
At any rate, Americans and American businesses seem to agree that, with an understandable glitch here and there, President Trump’s fast-start drug creation and rollout plans continue to work as well as anyone (except the media) could have imagined. And except for the fact that all this success is really the work of the crackerjack Biden Junta. All of which means that markets and the economy may very well improve a lot faster than pessimists believe.
Are US stocks overextended?
While stocks still look overextended to me, they may not be if the apparent US recovery continues apace. Given last year’s economic disaster, that amounts to very good news, except for the bond ghouls. They’d like to see the Federal Reserve raise interest rates at least 3-4 percentage points as of yesterday. Killjoys.
Oddities exist in this generally optimistic picture. Suddenly, even as indoor distance requirements for restaurants began to shrink, in some places from 6 to 3 ft., indoor dining remains off some 34% from pre-pandemic levels. Airline passenger bookings remain less than ideal as well, although seats continue to fill at a decent, though not great clip. Perhaps the unwinding of that unwisely extended American maskerade will continue to help restaurant and airline bookings to increase soon.
As serious Covid cases (not just those widely reported, cold-like “cases” the media likes to hype) continue to come down, economic numbers should also continue to improve. Americans, at least, are heartily sick of living under effective house arrest for over a year – at least in True Blue states. So I would guess they’re not going to take it anymore, at least as far as the CDC’s conflicting and thus irrelevant maskerade diktats are concerned.
On other fronts…
Momentary optimism may temporarily hide the Biden Junta’s plan to downplay the confiscatory taxes they plan to impose on the rest of us.
They claim they’ll only raise “taxes on the rich.” But the Dems always say this before dropping the bomb on the rest of us. The state-owned media then gives them cover.
Lest we forget, the Democrats gradually evolved, long-ago replacing the GOP as the “party of the rich.” And, as I’ve written many times in these columns, they can jack taxes up on their rich patrons all they want. But the rich will never pay those taxes, since they own and operate far more effective tax loopholes than the rest of us can access. Otherwise, you’d hear more complaints from them, right? Both they and the Democrats have always known this. But what do we hear about this simple truth from the media?
Steel, copper, entertainment, and other less-known opportunities
Meanwhile, Cleveland Cliffs (NYSE:CLF), one of our current favorites, continues to cruise back up the chars, although the sellers are returning again today. Every time this stock gains 1-1 ½ points, the sellers try to beat it back again, perhaps since short interest (another batch of sellers) has sneaked back up to 8.4% of CLF’s float as of April 15. (Public reports generally run about 2 weeks behind on this number.) Nonetheless, CLF seems in good shape to profit as industrial production rises once again toward normal levels in 2021. Most investors still fail to understand that Cleveland Cliffs has evolved from just another mining stock into a vertically integrated steel producer. Important distinction.
Copper is up again today, continuing it soaring trajectory. But for some reason, after gaining a bit Tuesday morning, our two copper plays, BHP (NYSE: BHP) and Freeport-McMoRan (NYSE:FCX), have sunk into the red zone this afternoon. Must be something happening that we don’t know about.
Discovery “C” shares (NASDAQ: DISCK) seem to have bottomed after the Credit Suisse / hedge fund mess defenestrated them recently. The Discovery Channel entertainment complex, based in Bethesda, Maryland (just outside of D.C.) should continue to recover. So we continue to hold and, perhaps, buy more on dips.
Wrapping stocks, investments, and maskerade parties up for the day…
But that’s about all the action we can muster today. When the market looks as toppy as it does, we consider raising some cash in our almost fully invested portfolios. One big reason: We’re about to enter the “sell in May and go away” danger zone. This sometimes standard investing “rule” claims that holding too many stocks a clear and present danger as summer approaches.
That rule didn’t work in 2020, mainly because of last March’s massive, epic coronavirus stock dump-a-thon. Which we actually took advantage of to buy grossly underpriced preferred stocks. That echoed the same highly effective move we made back in March of 2009. Both those moves have twice given us more capital gains than we generally earn from our best stock picks. It’s something that doesn’t happen very often, but it’s swell when it does. As Warren Buffett said, when blood is running in the street’s that’s usually the best time to start buying stocks. Worked twice for us now over a 10-12 year period. Just sayin’.
That’s it for now. Have a good afternoon, and things may prove more interesting tomorrow. Oh, and state rules permitting (sorry, Blue States), let’s all make plans to stroll down the street soon sans masks. No more fogged classes for this writer any more. The CDC maskerade is over at last. More or less. At least until Dr. Fauci gets 15 more minutes of fame.