Banks Profit From Coronavirus; Governments Equivocate; Fed Keeping Stocks Afloat

Since there is too much information being thrown around on the coronavirus crisis, here are some of the top headlines:

Stocks rallied again after another 4.4 million people filed for unemployment relief, but the gains were wiped out when the World Health Organization (WHO) leaked a report that suggested trials on Gilead Science's (GILD) treatment drug, remdesivir, were not going well. Gilead finished down 4.2%, and the entire US stock market complex finished the day essentially unchanged.

Thursday, as the House pushed through $484 billion in round two of the bailout loan program for small businesses, Bank of America, JP Morgan Chase and other big banks raked in $10 billion in fees for processing the first round of small business PPP loans. As they usually do, the federal government made sure to take care of their major campaign donors. One burning question: since Ruth Cris is returning the $10 million loan they received, is JP Morgan Chase returning the $100,000 fee they "earned" for processing the loan?

Then there's this video that shows Fox News reporter John Roberts and New York Times photographer Doug Mills in the White House coronavirus press briefing room this past Tuesday caught on a hot mic. The two discuss the fatality rate of the virus, with Roberts saying it's between 0.1 and 0.3 percent, and Mills responding that it's in line with the ordinary flu. Some news outlets are characterizing the video as misleading, suggesting the two are joking. Judge for yourself.

According to a study by the Department of Homeland Security (DHS) which highlighted Thursday's White House press briefing, warm weather, sunlight, and low humidity could have mitigating effects on coronavirus. This theory has been bandied about since the early days of the pandemic, and there's been no substantial evidence to claim that normal summer weather will slow down the spread of the virus or kill it completely, though most flu viruses are negatively affected by warmer weather.

The best evidence is likely anecdotal, as countries with warm climates in the Southern Hemisphere and near the equator have actually been less-severely affected by COVID-19 than more northern countries like the United States, Russia, most of Europe and Canada. For instance, Australia, which first began reporting cases of the virus in February (similar to Northern Hemisphere's July), has had 6,674 reported cases, but only 78 deaths. Malaysia, whose capitol, Kuala Lumpur is situated 350 km or 217 miles from the equator, has reported 5,691 cases but only 96 deaths. This suggests that while the spread may be slowed somewhat, the virility, or severity, of the virus may be diminished. Time will tell, especially in the US and Europe, as warmer weather approaches and states and countries begin reopening their economies.

Since April 7, the Dow Jones Industrial Average, the index of 30 leading US companies, has traded in a very thin range between 22,634 and 24,232, a mere 1,598 points in an extremely volatile market. The COBE Volatility Index, or VIX, which tracks volatility, has been below 39 just two times since March 5. Normally, the VIX holds between 10 and 18 with great regularity. Anything above 20 is considered to be edging toward extreme and readings over 40, which have been common during the coronavirus campaign, are rare. On March 18, the VIX registered a reading of 85.47, exceeded only by a high mark of 89.53, on October 24, 2008, at the height of the Great Financial Crisis.

Managing to keep the Dow in such a tight range can only be due to the Fed's massive inputs of cash to primary dealers via various funding vehicles created during the coronavirus crisis. Trillions of dollars have flowed to banks, who routinely put that currency to work buying stocks and keeping blue chip equities in a fairly well-defined pattern. Stocks go up, they go down, they go back up. The Fed is in control of what used to be a free, fair market. Freedom and fairness in publicly-traded stocks hasn't existed for quite some time. Now they are virtually extinct entities.

What most of the headlines and alternative media narrative suggests is that the global public is being used, abused and largely misinformed. Governments in developed nations are employing the virus and public lockdowns as cover for the failed global fiat currency economic system that will have to be replaced shortly, within six months to three years, depending on how long those in power can keep people from overthrowing the entrenched oligarchs, kleptocrats, cronies, and assorted liars and thieves in government, business, and the media.

When the new world currency is announced, it will likely be all digital (blockchain technology) because paper and coin currency is "dirty" and "may carry viruses." At least that would seem to fit the accepted game plan that's being etched out on an ongoing basis. It will be up to individuals - not governments - to either accept or reject new currencies offered by the same people who destroyed the old system or opt for alternatives like gold, silver, bitcoin, and the tried and true efficacies of bartering goods and services.

There may indeed be more than one global currency: one for international trade and governments, and one for everyday commerce by the people. Whatever occurs, the next few years are likely to be convulsive and disruptive to what most people consider normal.

At the Close, Thursday, April 23, 2020:
Dow: 23,515.26, +39.44 (+0.17%)
NASDAQ: 8,494.75, -0.63 (-0.01%)
S&P 500: 2,797.80, -1.51 (-0.05%)
NYSE: 10,916.67, +8.11 (+0.07%)

Dow Gains 259, NASDAQ, S&P Set New Record Highs

Since June 27, the NASDAQ has made a strong advance of 572 points, a nifty 7.68% return in two months.

The S&P 500 has tacked on 196 points over the same span, a 7.26% gain.

The Dow has galloped ahead 1933 points in the past two months, 8.02%, topping both index rivals and closed above 26,000 on Monday for the first time since February 1. Overall, investors are piling into stocks, unconvinced that the Fed's now-quarterly interest rate hikes will slow down US production in major industries. Income creation has been a duopoly since the Trump tax cuts became effective after the start of the year and stocks shook off the shocks of February and March.

With the Dow posting gains in six of the last eight sessions, the industrials have added nearly 900 points since August 16. With a three-day holiday dead ahead, the positive vibe may extend through Friday.

There is no other way around it. This rally is real, and has legs. The next FOMC meeting and widely anticipated 25 basis point rate hike is still a month off, on September 25-26.

Along with the NASDAQ and S&P closing at record highs on Monday, the Dow is a mere 600 points from its previous high from January 26 of 26,616.71.

Summertime... and the profits are easy.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61
8/15/18	25,162.41	-137.51	-245.12
8/16/18	25,558.73	+396.32	+151.20
8/17/18	25,669.32	+110.59	+261.79
8/20/18	25,758.69	+89.37	+351.16
8/21/18	25,822.29	+63.60	+414.76
8/22/18	25,733.60	-88.69	+326.07
8/23/18	25,656.98	-76.62	+249.45
8/24/18	25,790.35	+133.37	+382.82
8/27/18	26,049.64	+259.29	+642.11

At the Close, Monday, August 27, 2018:
Dow Jones Industrial Average: 26,049.64, +259.29 (+1.01%)
NASDAQ: 8,017.90, +71.92 (+0.91%)
S&P 500: 2,896.74, +22.05 (+0.77%)
NYSE Composite: 13,102.03, +102.59 (+0.79%)

Seriously, a Rebound? No Volume, and Slim Gains

It's almost summer, so stocks and the people who trade them aren't going to take much of anything too seriously. It's a good thing that the American culture is as laid-back as it is, because if people watched their money, markets and politicians with reasoned discipline, we'd all be in the soup - or soup lines.

Being that the weather's more suited for surfing than high finance, Wall Street put on its best summery smile today and boosted stocks for no particular reason other than there wasn't any disturbing economic news from Greece, or Washington, or anywhere else for that matter.

It's these kinds of days that Wall Street could use a steady diet of to produce what will be called a "summer rally" despite the Fed cutting off funds via the end of QE2, and Greece more likely than not to default. Whatever Greece decides to do about their fiscal and monetary condition, it will have far-reaching effects, mostly on European banks, but surely some spill-over will do damage on American shores. Everyone's in for a piece of the action, and haircuts for the bond-holders seems to be the likely outcome, though the EU and IMF ministers would much rather lay it all on the backs of the Greek people, through austerity, budget cuts and a wrecked economy.

However, since nobody took any decisive action today, it was safe to make a few bets in the cavernous casino that is Wall Street. Besides, after six losing weeks, the markets were set up for a technical bounce, in other words, more suckers got taken today.

Dow 12,080.38, +76.02 (0.63%)
NASDAQ 2,629.66, +13.18 (0.50%)
S&P 500 1,278.36, +6.86 (0.54%)
NYSE Composite 8,032.22, +32.11 (0.40%)

While the gains weren't much to speak of, neither was the breadth. Winners beat losers, 3991-2443, roughly a 5:3 margin. NASDAQ showed that there was still a good deal of selling going on as only 29 stocks made new highs, but 104 hit new lows. ON the NYSE, 32 new highs and 53 new lows, so the combined total was another winner for the new lows, the 12th straight of that variety, with 61 new highs and 157 new lows.

Since volume was non-existent, one would be correct in believing that the correction was just taking a breather. Nothing goes in straight lines, so count this as one of the few good days in a continuum of downers.

NASDAQ Volume 1,612,915,750
NYSE Volume 3,371,598,000

Crude oil continues to demonstrate weakness, up only 25 cents on the day, to $93.26. Some of the crude decline is beginning to show up at the pump. AAA reports the national average at $3.65 for a gallon of unleaded regular, with the lowest to be found in Tennessee, at $3.45/gallon.

Gold gained $1.40, to $1541.40, while silver was up 14 cents, to $36.04.

All in all, it was a dull session, which is probably the way it should be. Wild swings are for gamblers and home run hitters. A dose of slowness - like the way markets were back in the 50s and 60s - might not be such a bad thing.

Ah, summer. Ya gotta love it. Almost makes one fell like taking the car out for a spin. Well, maybe.