Monday Market Movement – More Stimulus, of Course

Yes, we still have the virus.

2.2% more cases per day now, up from 1.9% the week before.  That's the very opposite of having things under control with 14.5M Global cases, 606,206 Global deaths and 3.8M in the US (26% of the World's total) and 140,534 Americans are dead – that's like 35 9/11s in the 120 days since Trump told us the virus was nothing to worry about. 

Of course he's still saying that and our case count is skyrocketing.  The chart above is not a chart of Covid cases but a chart of Hospital Capacity and we are at or over the limit in 7 states, including my own Florida which hit 127% of capacity this weekend.  NOW people are going to start dying, big time.  That's why the President stopped hospitals from reporting to the CDC last week – these numbers are going to get shocking and the Trump Administration has no intention of doing anything to stop it.  

Why?  Re-election, of course.  Trump's only chance now is to keep you locked in so you won't go out and vote in November.  The entire Republican party needs the lowest possible voter turnout in November and they are doing everything in their power to ensure that happens – even if it leads to another 140,000 voter deaths.  

I think everyone saw Trump unleash the storm troopers in Portland this weekend and, of course, the situation got worse, not better.  Rioting has become the new American passtime in Trumpland and just wait until they try to force the colleges to re-open and put 14,500,000 student lives at risk by jamming them into lecture halls and dormitories.  It's very much like being drafted to risk your life for Capitalism in the 60s and we can expect a similar response as students are forced to leave the relative safety of their homes for the first time in months. 

Of course, that's nothing compared to Trump and DeVos' anti-science experiment on our 56.5 Million young children (and their teachers) who are being forced to go back to school where they will, of course, be way too close to each other every day and then, every day, they will come home and try to infect their families (statistically another 100M people) and those people will, in turn, potentially affect their co-workers who will infect their children and send them back to school to make sure they infect all the stragglers.  

You think the hospitals are over-capacity now – just wait 'till September!  But no one seems to notice, no one seems to care – least of all the stock market, which continues to ignore every possible looming fact that this country is going to fall right off a cliff the second the Fed and the Government stop printing money.  On the other hand, if they keep printing money, we'll eventually hit an inflationary cycle that is going to be equally dangerous.  

21 retailers have filed for bankruptcy in 2020 so far: Select a retailer to learn more about their bankruptcy. RTW Retailwinds (July 13) Muji USA (July 10) Sur La Table (July 8) Brooks Brothers (July 8) G-Star Raw (July 3) Lucky Brand (July 3) GNC (June 23) Tuesday Morning (May 27) Centric Brands (May 18) J.C. Penney (May 15) Stage Stores (May 11)     Aldo (May 7) Neiman Marcus (May 7) J. Crew (May 4) Roots USA (April 29) True Religion (April 13) Modell's Sporting Goods (March 11) Art Van Furniture (March 9) Bluestem Brands (March 9) Pier 1 (Feb. 17) SFP Franchise Corp (Jan. 23)
Those are just the big ones and, don't forget, that's WITH life support still being applied but the $600 weekly unemployment bonus runs out this Friday and that's going to be $2,400 per month less for 25M unemployed Americans and now they have to figure out how to make ends meet on $275/week instead of $875.  Yes, the $875 was generous and that's why Consumer Spending didn't fall off a cliff during the crisis but 25M x $600 is $15Bn/week less spending power unless the Government extends the program and that can quickly double the chart above – not to mention throwing housing into a new crisis as 25M people won't be able to afford rents or mortgages anymore.  

And what happens when you can't pay the rent?  Well then Mr. Landlord can't pay his bills either and his bank gets upset when Mr Landlord can't pay his mortgage payments and the Government did stop foreclosures when we didn't need it but now that 25M Americans are going to need it – that program is also over.  Like the hospitals, the courts will also soon be overhwhelmed with eviction and foreclosure processes.  At least we can all get jobs as lawyers now….

Earnings season has not been that bad yet but that's because the kind of companies that report early in the cycle are the kinds that have massive accounting departments that can get their books organized right after the quarter closed (June 30th).  It's only July 20th and only 1/4 of the market has reported and now comes the fun part as we hear from hundreds of companies this week – still including some of the biggest:

It's still a bit early to make calls ahead of earnings, we're more into waiting for perfectly good companies to sell-off over short-term issues, like the virus (hopefully short-term), which is still devastating America but the rest of the World has it more under control.  Either way, we should hopefully have some sort of vaccine in Q1 so we're only about 6 – 9 months away from the finish line – not a long-time for long-term investors and well within the range of our 2022 options with 2023 options coming out.

There's not much data this week:  Chicago Fed, KC Fed, Housing, PMI and Leading indicators and NO Fed speak as we're only 8 days away from the 28th/29th FOMC meeting so we're in the "quiet period" and that will be interesting with a 20-year bond auction on Tuesday and a 10-year TIPS Auction on Thursday – usually the Fed talks down rates ahead of the auctions.  

It should be an interesting week so stay tuned!  

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