“Stock futures jumped Monday morning to recover from Friday’s technical test as expected” — Paul Ebeling
…the current state of play in this hyped VirusCasedemic news cycle is this:
- Moderna thinks it may be able to develop a new vaccine to fight the Omicron variant by early 2022. “If we have to make a brand new vaccine I think that’s going to be early 2022 before that’s really going to be available in large quantities,” said Paul Burton, Moderna’s chief medical officer, in a Sunday BBC interview. Moderna stock was up 20% on Friday. Hot take: I think this commentary may alleviate a little of the angst among medium to longer-term investors, with the emphasis on a little.
- Dr. Anthony Fauci told “Face the Nation” on Sunday the U.S. “has the potential to go into a fifth wave” of the pandemic. Hot take: Obviously worrisome, and will only fuel the near-term bearish narrative.
- Travel restrictions are on the rise from developed economies as officials run their COVID-19 protection playbooks. CNN has a solid breakdown of where the travel bans have kicked in. Hot take: Here comes talk of lockdowns. “If border restrictions are not effective and variant characteristics are as bad as some fear, there is risk more lockdowns will be needed to avoid overrunning health systems, at the very least in affected regions. Some health departments may lean towards taking early precautionary action to avoid much greater economic risks down the track,” points out JPMorgan’s research team.
- On Sunday, Germany and Italy confirmed their first Omicron cases. Hot take: Those reports will feed the short-term bear take that COVID mutations are spreading quickly and are resistant to current vaccines.
The Bull thesis on stocks is in place.
The S&P 500 entered these latest virus fearmongering hype trading on a P/E ratio of just 2 pts higher than 2yrs ago.
Supply chain problems are going to be with corporate America into Y 2022, and a Key risk to Q-4 earnings for liquor makers Diageo and Brown-Forman is the ongoing bottle shortage.
Looking Ahead: There is a NFPs jobs report on Friday.
Have a healthy, prosperous week, Keep the Faith!