Only the 7 % Want Normal Again

Who are the 7 %, they are the 1 % and the other 6 %, all the people who aspire to be in the 1 %.

What I am saying is that I find it interesting in talking to people I know and others I read about. There are a lot of people who realize there can be a world where you have time to absorb the beauty of things around you.

So I see a new paradigm evolving with a lot of cross currents for the seemingly embraced evaluation of Normalcy, the stock market.

Signs and perceptions for a higher market are:

  1. First, no doubt number one is the historic FED and Treasury intervention along with Congressional stimulus bills.
  2. Second there is a strong hope and belief that pharmacetical companies will come up with drugs first and a vaccine second, that will make this all go away soon.
  3. The President’s daily higher Stock Marketing message seems to get through to his 33 percent.
  4. There is a strong belief on Wall Street that if they hold hands they can look over the abyss and ignore the bad news.

Signs and Perceptions for a defensive and lower market are:

  1. Number one on this side is the lack of coherency in The Federal COVID 19 program. The base case for comprehensive testing is being dismissed.
  2. Number two, polls show that 62 % of the people believe that the stay at home orders are good and working and 26 % would actually like stronger rules. Only 12 % want things to go back to normal and open things up.
  3. Third, media has not done a good job, probably because of a lack of data, to show that there is a third aspect to those who end getting infected. It is not just you heal or die, there is a significant contingent that end up with long term disabilities.
  4. The result is, I believe, that a majority of Americans will isolate in place on their own until strong and universal Federal regulations are instituted.

Market Evaluation of all this at the moment. The FED/Treasury Bubble on the S&P and High Yield bonds mentioned yesterday is containing the market. The S&P is working around the central part of that bubble, 2760 to 2840.

Gold remains the highlight at the moment.

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