WASHINGTON – US stocks took off Tuesday morning like a cannon shot. Nothing terrible happened during the Memorial Day weekend to lessen the bullish Wall Street move. But today’s massive did stall near the closing bell after insistent rumors that the administration intends to apply sanctions on the Beijing government as they continue their absorb Hong Kong into the People’s Paradise. That wasn’t enough, however, to stop investors from rejoicing as America’s now discernable Grand Reopening unfolds. Wall Street watched US stocks rocket ahead as a result.
(Note: Anyone who expects any Communist government to live up to its treaty commitments does not live in the real world.)
More on today’s Grand Reopening rally
Today’s rally turned out to be quite impressive, as the financial media duly noted.
“Stocks surged on Tuesday as optimism grew about the reopening of the economy and a potential coronavirus vaccine.”
“The Dow Jones Industrial Average gained 529 points, or 2.2%. The 30-stock average briefly traded above 25,000 for the first time since early March before closing just below the mark.
“The S&P 500 rallied 1.2%, briefly breaking above 3,000 for the first time since March 5. The Nasdaq Composite lagged, rising just 0.2%.”
Even better was this bit of news via Fox.
“Financials got a boost after JPMorgan CEO Jamie Dimon made some optimistic comments about the economic recovery post-COVID-19 and the health of his bank.”
Like Mr Market, JP Morgan Chase, financial stocks rocket ahead Tuesday
JPMorgan’s shares (trading symbol: JPM) took the hint and rallied Tuesday for a whopping 7% gain. That made this columnist particularly happy, since our accounts have been accumulating JPM shares little by little since the bottom of the spring market crash. JPM’s big move contributed greatly encouraged other beleaguered banks to get themselves in the plus column as well.
Meanwhile, drug companies kept investor optimism high. Several pharmaceutical companies are reporting breakthroughs in potential candidate drugs and vaccines to treat or even prevent the Wuhan coronavirus. However, there may be only one or two winners in this life-and-death sweepstakes in the end.
Stocks rocket ahead. But how about the US economy?
At the same time, as states continue to loosen their death grip on statewide individual and business quarantines, affected sectors of the economy have begun snapping back quite impressively, proving in many cases more robust than national Mr. Know-It-Alls have been predicting in their uniformly negative prognostications.
In other words, our long national nightmare is starting to be over, at least for now, and it looks like America is eager to get the Trump Economy back in gear. This is no doubt galling to campaigning Democrats. They fervently hoped that China’s nastiest export would end up toppling Trump as neither the fake Russia scandal nor the Pelosi-Schiff impeachment farce could.
Obviously, investors have been betting on Trump and against both the virus and the mass of discredited Democrats, and this continues to aid stocks at least in the short run. But as we should know by now, it ain’t over until it’s over. So luck and skill will still have to tilt consistently in the GOP direction in order to defeat the Democrat-Media complex and a potential new socialist government in 2021.
Oil experiences its very own Grand Reopening
On the fossil fuel front, oil, specifically West Texas Intermediate (WTI), which we follow here, got another boost today on evidence that people are beginning to travel again by car and by air. WTI closed the day at $34.31 per barrel. That’s a 3% increase on the day, an astonishing ongoing recovery from late last month when WTI crude bottomed at a mind-boggling -$37.00 per barrel for the current month’s futures contract.
$34+ per barrel still isn’t enough to get America’s shale oil wildcatters back in the profit column any time soon. And indeed, some of them may go belly up some time this year. But the increasing price of oil remains encouraging nonetheless, because it means that people are actually using petroleum based products again.
Backing up this cautiously optimistic Grand Reopening of America, the previously stodgy Powell Fed has turned on every money spigot it can find, even inventing new ones where they never existed. This direct and indirect liquidity continue providing the fuel Mr Market still needs to power up and beyond the market highs he experienced just a few short months ago. Trading will likely remain rocky. But it does seem as if Mr Market wants to go higher no matter what. Particularly on a day like today.
Of course, we’ll continue to experience market reversals, some of them quite nasty. But volatility continue to decline making it, at least for now, safe to acquire new, promising investments. But slowly and cautiously.
That said, the VIX volatility index continues is slow, occasionally jagged descent toward normalcy. It declined to just above 28 on its vertical scale, significantly down from the colossal mid-85 range it experienced at the height of the coronavirus crash.
Could stocks rocket ahead again on Wednesday and beyond?
Here’s hoping we have more good news tomorrow. But we can’t count on it.
The media, and the Democrat-controlled House will keep lobbing negative stories at America, hoping that one or two of them might stick and derail President Trump’s chances this November. We’ll just have to deal with these serial falsehoods as they pop up.
Meanwhile, as even resistant Blue State governors are forced to fire up their states’ economies despite not wanting to (because Trump), I’d predict that America will recover from this unprecedented shutdown much more robustly than media naysayers predict. Yes, we may get round 2 and even round 3 of coronavirus tag before the year is done.
But we also suspect there’ll be fewer deaths in the next rounds since at least some semi-reliable treatments are now available to hold off the mortality rate even as one of those fabled vaccines claws its way to the finish line.
Above all, however, it seems clear that average Americans are not prepared to go through another economic shutdown ever again. Which could mean the US economy could get its sea legs back much more quickly than anyone thought possible.
– Headline image: Cartoon by Branco. Reproduced with permission and by arrangement with LegalInsurrection.