WASHINGTON – It’s another week and another likely wild ride on Wall Street for US stocks, as several tech CEOs get ready to face Congress in another ritual grilling later in the week.
As of 2:15 p.m. ET Monday, major stock averages are slightly up to better than average up. The Dow and the S&P 500 are up 0.25% and 0.55% respectively. But the recently beleaguered, tech-heavy NASDAQ looks more robust today. It’s currently back in the green and up 1.35% thus far on the day.
Wild ride or no wild ride?
Innovative Income Investor’s Tim McPartland provides us with a measured overview of the rest of this week’s likely market action. He doesn’t seem to expect a wild ride, although we do.
“Another week is upon us and another bit of mystery as to how markets will trade presents itself.
“We have some potentially ominous developments, which we all knew were coming, at hand and no one—no one, knows what 20 million folks having their paychecks cut by $600/week will do to the economy and the equity markets. Additionally eviction notices are starting to be issued to those who have not paid rent for months and soon foreclosures will begin to occur on some of the homeowners who are now part of the 5 million or so mortgages now in forbearance.
“Of course we all know that congress will create new programs for aid to these folks, but I am guessing with somewhat less generous terms–just the same ramp up the printing press once again. The time between now and when a new stimulus is hammered out could be rocky, but on the other hand could it be that the ostriches will simply bury their collective heads in the sand and ignore the obvious?”
The actual wild ride may occur in Congressional budget battles this week.
Of course, like the annual, totally partisan year-end budget battles we denizens of The Swamp get a ringside seat for each year, the Senate will battle toward something reasonably acceptable on the stimulus front only to be steamrolled by an out-of-control, pro-socialist house that’s primarily looking to print money to pay off their supporters and, via institutional payback, stuff their national campaign coffers the better to stiff upstart GOP candidates this fall.
Since the Democratic-Communist Party always wins and since the hapless GOP always caves, we can look for a bucket of red ink far bigger than the roughly $1 billion add-on package the GOP led Senate proposes.
And, of course, the reconciliation and final vote will get tied up for a few more days, enabling the Democratic-Communist Party to extort a few extra billion for their pals while blaming the GOP for the bill’s delay, aided and abetted as usual by their lapdog media whores. Rinse, repeat. It’s the way things go these days. And taxpayers, as always, will get stuck with the bill for all the “free stuff” that isn’t.
Tired of tech-led political censorship. Tech CEOs have a “conversation” with Congress this week.
Moving back to Wall Street, most tech stocks continue to shake off what remains of their early morning blues. Frankly, techs have gone up way too much recently and were do for a bit of a selloff. And some investors also worry about testimony that Facebook’s (trading symbol: FB) Mark Zuckerberg, Apple’s (AAPL) Tim Cook and other Silicon Valley CEOs are slated to provide Congress a bit later this week. Headline risk as usual. These tech CEOs are likely to get an earful from Congress about their obvious intent to employ censorship regimes that favor their favorite globalis, socialist, Democrat candidates.
The contentious subject of these hearings: social network and app censorship of certain political points of view during the contentious run-up to Election 2020. Plus other topics, depending on what soapbox various Congresscreatures choose to ascend. If the tech CEOs take a palpable hit, their stocks are likely to suffer. On the other hand, today’s betting, at least, seems to indicate they’ll hold their own. Even though they obviously censor the bejeezus out of right-of-center points of view.
Sooner or later, techs and social networking companies, not to mention entertainment conglomerates, are likely to face much more regulation. But right now, maybe not. We shall see.
Looking at our portfolios
As for our portfolios, we’ve sneaked back into the Amazon shares we sold for a profit last week. Meanwhile, the Robinhood gang and high-frequency (t)raiders dumped truckloads of shares, probably for the same reason. AMZN is catching a bid this morning, so we’ve sneaked back into at least a couple of these costly shares, which currently trade at or around $3,064.00 per share.
It’s ridiculous. And currently, prices like these prohibit investors like us from writing covered calls as an extra-income strategy, given that you need to hold at least 100 share multiples to play. Which at Amazon’s current per share price would cost us only $306,400. Which isn’t exactly the way to build a balanced portfolio. The SEC is rumored to be working on a new rule allowing the writing of options on lower numbers of shares. But, given how our efficient government agencies work these days, some of us will be dead before we see any update.
We’re also trying Facebook shares again, a little at a time. They remain under some pressure as well, so we’ll see what this week’s hearings may bring, besides death and destruction. In general, we hate big tech and the mega-wealthy tech CEOs that run them. They’re all closet Commies. But true to our philosophy, we’ll invest in these miscreants anyway. Just as long as they make us money. Although that makes them no less reprehensible.
Still investing in oil and energy
Our small positions in oils and refineries, mainly in Conoco-Phillips (COP), EOG Resources (EOG), Plains All-America Pipelines LP (PAA) and our favorite refiner, Valero (VLO) are holding their own – particularly our shares in COP and VLO. And our preferred stock holdings are nicely profitable now. We adjusted our mainly interest paying positions during the spring crash to average severely down, betting on the better preferred shares, financial health-wise. Which has put us in a very profitable position on these shares. For now.
Bit questions? Do we hold these and keep earning above average interest payments? Or dump them for capital gains? Good arguments abound for both potential decisions. So, of course, we continue to dither.
That’s about it for today. We look for more volatility as the week progresses. Particularly as Congressional hearings near. And also depending on how many deaths the nation’s “peaceful protestors” cause as they continue to ramp up the violence in unfortunate mainly blue states and cities.
The climate of left-wing political hate still influences markets
On a closing note – one that is affecting the investment climate – I feel sorry for the folks who live in these true jurisdictions. But also, I don’t. After all, who the hell votes for the jackholes who permit violent and obviously organized and subsidized political thugs to run wild week after week, destroying small business after small business and burning down the last ones that thus far managed to survive the coronavirus
pandemic epidemic health issue?