WASHINGTON, January 8, 2015 – Wall Street is having a very nice yet somehow boring day Thursday, with averages sharply up, oil still under $48 bbl. for West Texas Intermediate futures, gold off a bit, and pretty much everything nicely up including some battered oil and gas stocks. Maybe that long-awaited 2015 Deep Freeze is finally here to stay awhile, warming this market sector up again and just in time.
Time to buy?
Well, maybe, but not with great enthusiasm just yet.
While markets seem to have shrugged off the ongoing French “Je Suis Charlie” terrorist disaster with a two-day rally (probably because the deceased cartoonists were French and not New Yorker contributors), something still seems not quite right.
Barely positive market news has been touted nonstop as something akin to the Second Coming—something we could seriously use at this point, BTW, if only to wipe the condescending smirks off the latest Islamofascist serial killers’ miserable and godless faces. Wall Street continues to float in an indecisive fog, off the cliff one day and back up into the stratosphere in another. Even Kafka would feel unsettled in the current milieu.
If Thursday stays true to pattern, we should see some stock dumping after 2:30 p.m. EST and then very probably a tepid to down day Friday to make up for the last two days’ irrational exuberance as well as raising some cash for those always surprising weekend news announcements, cleverly delivered after the market has closed for the weekend.
In any event, following through on our recent hints, we’ve sneaked into a bit of SDOG, the ETF that encompasses various high-dividend paying but downtrodden stocks, using it as a proxy for buying some of the risky Dow Dogs we cited in a related column.
Meanwhile, though, we have picked up a bit of Dow Dog Pfizer (PFE), which seems to be doing nicely, plus a bit of stock in Swiss pharma giant Roche (RHHBY), which seems to have bottomed at the end of 2014. We’ve also been watching American pharmas like Merck (MRK) get away from us and we refuse to chase things, so we may have to pass on this one.
Pharmas, as you may recall, were a big reason why Obamacare happened, as the ACA was designed to roll a lot of profits their way. So until and unless the new and likely feckless Republican Congressional Majority learns to actually attempt to implement what they promised to voters last fall—unlikely—pharma in general, along with mega drug store chains like CVS (CVS) and certain hospital chains are likely going to be a good place to park your money, as you’re already sending them a lot of it via your Obamacare premiums.
As I once told my late father-in-law about investing in your local electric utility, hey, if you can’t beat ‘em, join ‘em. The fat dividends will help pay your bills. Pharmas pay fat dividends too, and they’ll keep you reasonably happy if you hold onto them in the rough patches. Remember: they’re now taxpayer supported!
Other interesting stuff is available in the market, of course. Oils are in many cases oversold now. Ditto stocks in select heavy industries.
That said, they could all go lower in a heartbeat, though, no matter how happy they might be today. So we remain cautious as the second weekend of an already weird January 2015 promises to hibernate in sub-zero global warming climate change temperatures over the weekend. Stay warm and hold onto your cash for now.