Markets politics

Skepticism, Dispersion, And ‘Fanciful, Specious’ Theories

The rotation set in motion by Monday's vaccine breakthrough extended into Tuesday, which ended up being another session characterized by outperformance for small-caps and pain for expensive tech. A week that began with euphoria looks poised to be defined by dispersion, and that's assuming the optimism around vaccines, therapeutics, and the US election holds. If it doesn't, the week's defining feature could be disappointment. Brazil halted a late-stage trial of a Chinese vaccine due to a serious adverse event. In China, shots have already been rolled out, so any trial setbacks in other countries could both underscore the perils of moving too quickly and cast doubt on Beijing's transparency vis-à-vis the safety of vaccines administered to the public. On the bright side, an antibody therapy from Eli Lilly was granted emergency-use authorization in the US, giving the whole narrative an extra bit of sheen. 13 countries have supply agreements with Pfizer for its vaccine and another four with Moderna, for its experimental shot. "The outsized market reaction to the Pfizer/BioNTech news was illogical. The whiplash price-action across almost all assets has left behind a more fragile ma
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10 comments on “Skepticism, Dispersion, And ‘Fanciful, Specious’ Theories

  1. Thank you for adding the Trump update. I also heard that the Director of Personal just issued a memo stating that anyone in the administration is caught looking for a job will be terminated. So it looks like if your a 20-30 year old facing reality that Trump lost, you could get fired, which would mean no unemployment or reference. It really does show the pettiness of Trump. I know you have given many other ways he shows his pettiness but this really takes the cake!

    • I work the Trump updates in almost every day. But I’ve found that what’s appreciated and most useful for readers is to put them in context of longer pieces. It’s not that I’m trying to “bury” them, it’s just that I think readers come here for comprehensive, yet concise takes on “everything” that’s going on. So that’s how I try to approach things. It’s not that I worry about turning readers off with posts dedicated to things like, say, Barr’s memo — it’s just that doing individual articles on those kinds of things without any additional color doesn’t play to my analytical strengths. There’s just not much to add on something like a memo other than the requisite sarcasm. I did make an exception during the impeachment proceedings. I dedicated quite a bit of individual coverage to testimony there, but that was necessary because if you didn’t keep up with the characters, it was impossible to know what was going on. In any event, I think readers appreciate the holistic approach. I want people to know that every piece I publish is worth reading and that no post is done simply for “the sake of it,” so to speak.

  2. Republican support for Trump’s legal challenges is likely simple pandering to the party’s base which at this point is wholly owned by Trump.

    Regardless of intent, if Trump feels that he has a groundswell of support among Republicans, he will be emboldened. That would be a dangerous development.

    • uptownguy says:

      I’m increasingly concerned this is not about simple pandering. As time passes with no evidence produced, I’m beginning to suspect trump et. al. have decided that if it’s evidence they need, then it’s evidence they’ll create. The pandering, the upcoming rallies, the abuse of Justice Dept power, the lining up of Congressmen – it may all be distraction and spade work in preparation for evidence constructed in background through bribery, fraud, coercion, tampering, etc – all of trump’s primary life skills. Rudy’s involvement looked optically foolish, but trump’s fixer may be just the guy for the actual job being carried out.

      Of course, the evidence for this whimsy on my part is no stronger than the Republican’s evidence for fraud. But I do worry that the market is underestimating trump’s capacity for malfeasance (I know; that’s tough to imagine at this point).
      The market’s presently benign political assessment could fade as rapidly as the blue wave receded if the new current question becomes “is this a legal challenge or a coup?”

  3. Ria says:

    The fact that there is a rotation of sectors is actually a positive overall for the financial markets. Low cross correlations suggest we are getting back to some sort of normalcy in the stock market and economy. The question is whether this is a short term event which will burn out. The GOP will end up facing reality- they have no choice really. The question here is how much damage will this do to Biden’s transition and start (probably not too bad given his contacts and experience) and how much long term damage will this do in encouraging the far right base to deny the outcome of the election. Smart GOP Congressmen will quickly assume the role of loyal opposition. The quicker they do this the better chance of mounting an electoral comeback. Denial will only prolong their pain. Talk about painting yourself in a corner.

  4. joesailboat says:

    The vaccine did not change the outlook on daily deaths through February. I hope Kushner has those ventilators maintained, we will need every one of them come January.

  5. Thanks for your response. I loved your article and I do look forward to your color. I appreciate the holistic approach I thought you might have missed the issue caused by the memo that’s all.

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