WASHINGTON – This already very bad week for stocks turned decidedly worse Wednesday. All three major averages – the Dow, the NASDAQ and the S&P 500 – are off nearly 3% as we approach 1:30 p.m. ET on Wall Street. Everyone writing on finance, from CNBC’s headline writers and columnists to local low-page views bloggers says it’s that scary Second Wave coronavirus outbreak nationwide that has Mr Market spooked beyond any normal psychotic break. Which has led to our Wednesday market crash.
More on that allegedly market-driving Second Wave coronavirus outbreak
Take CNBC, for example. Please.
“U.S. stocks fell sharply on Wednesday amid concerns over the latest increase in coronavirus infections and its potential impact on the global economy.
“The Dow Jones Industrial Average dropped 900 points, or more than 3%. The S&P 500 slid 3.2% and the Nasdaq Composite traded 3.4% lower.
“The U.S. indexes took their cues from the European market benchmarks. The German Dax index dropped 4.2% to its lowest level since late May. The French CAC 40 slid 3.4%. The FTSE 100 in London closed 2.6% lower.”
But directly following this party-line lede, CNBC delivers this more interesting tidbit.
“‘Investors’ hopes that the COVID pandemic would not force further stringent mitigations measures and/or potential wholesale lockdowns that would push global economies back into “low-consumption mode” appear to be coming under challenge,’ said Yousef Abbasi, global market strategist at StoneX. ‘Avoiding these stringent measures has been a major tenant of the bullish thesis, particularly for those looking to value stocks and for a steeper yield-curve.’”
Abbasi is paying far more attention to market dynamics, and he’s likely onto something substantial here. If his thesis holds true, that means that some of the latest in-fashion investor moves – based, presumably, on the consequences of the indefinite coronavirus lockdowns recently championed by Basement Joe Biden – are being thrown out the window as more astute investors re-examine their grip on reality. It also means that the alleged stock market fear of our currently touted Second Wave coronavirus outbreak seems greatly exaggerated. As tomorrow’s quarterly growth figures are likely to show. Convincingly. Which could end our nasty Wednesday market crash earlier than expected.
Deep State mythology to blame for today’s Wednesday market crash?
Politically speaking, given the nefarious machinations of the anti-Trump Deep State Swamp over the past four years, the politically minded might also conclude that this latest Second Wave coronavirus outbreak mythology, both here and in Europe, is strangely coinciding with the final week leading up to the momentous 2020 US electoral sweepstakes.
After all, since the Democrats have increasingly decided to focus on an all-coronavirus all-the-time strategy to defeat President Trump, that’s all they have left in their arsenal. And not much more, as the top of their ticket is headlined by an obviously aging, handpicked candidate whose barely concealed dementia shows a gradual daily disconnect with facts and reality.
“So let’s scare everybody about coronavirus again, because it’s all Trump’s fault,” they and their in-the-bag media minions proclaim. Without evidence. (And forget the Chi-coms. They fund our re-elections. Nothing to see here.)”
Scared soccer moms will vote Democrat every time. Right? Right? Well, maybe not. Because those soccer moms can already see that the Antifa / BLM / indigenous, Democrat-led city looting machine is coming for the suburbs next.
Failed political expectations may be driving the current market crash
President Trump is already successfully countering the Democrats’ sorry coronavirus crew, pitching the message to highly motivated middle- and working-class voters that the loss of jobs, homes and a bright future due to another round of lockdowns will cause far more fatalities, directly or indirectly, than the coronavirus ever could.
So what do they have left? Their own media lockdown on the Biden-Ukraine-China money-laundering scandal? Too late. The alt-truth media, including the New York Post and, last night, Tucker Carlson, have smashed through the flimsy gates of that fake-news, fake social media fortress. And the polls are turning in the direction of Donald Trump’s re-election. And perhaps even the retention of the Senate by the always hapless but now marginally spot-on GOP.
Dealing with the Meaning of Life after November 3 (or later)
But what in Hades does this all mean to investors like you and me? It very well could mean that this week’s stock market smackdown is the mass movement of traders and investors out of pro-Biden trade moves in the final trading days leading to the dawn of November 3, 2020. Maybe it’s best to either clear out of pro-Biden positions (re: those tracking the “Green New Deal” including anti-oil, anti-fracking sales and short-sales), or dump portfolios entirely. Then await final election results, which will likely occur between midnight November 4 and some time before Election 2024.
At which point, everyone will pile back into pro-Trump, pro-energy, pro-consumer, pro-middle and pro-working class stocks. Then, investors can resume the latest phase of the Great Trump Rally. Maybe even coincident with a surprise Christmas Rally to conclude the year on an equally strange but happy note.
In other words, we might want to view this week’s fire sale of stocks (with apologies to Philadelphia) as the prelude to massive electoral surprise #2, the 2020 edition. That’s not a prediction. But, along with Yousef Abbasi’s earlier comments, it’s an alternative scenario to the one you’re hearing, seeing and reading daily. The same one that turned all media and most politicians into the biggest set of bloviating, Wrong Way Corrigan chumps of all time in November 2016.
Stay tuned. And let’s all consider not dumping all our stocks this week. Just the truly chumpy positions. Next week will be no week for chumps, either in The Swamp or on Wall Street. And that includes home gamers like us.
– Headline image: Cartoon by Branco. Reproduced with permission and by arrangement with Comically Incorrect.