Don’t Get Mad at the Callous-Hearted Market

COVID-19 case counts are surging in heavy populated states, including Florida, Texas and my home state of California.

Now, if you just saw the headlines reflecting the above reality this week, you would probably think that stocks were lower — and you’d be right, yet you would only be half right. The reason why is because while markets have been nervous for the past couple of weeks regarding the widespread economic reopening, the concomitant rising coronavirus infection rates and increased hospitalization rates in regions of the country that hitherto have been spared from the worst of the viral damage. Until a few days ago, the markets basically ignored the rising COVID-19 data.

The reason why markets were ignoring the data is because they are not focused on rising coronavirus numbers. Now, that’s not a description of a callous-hearted market, but rather a fact of reality.

You see, markets care about the economy. Anything that negatively influences the economy is bad for markets, and anything that doesn’t materially influence the economy largely will be ignored by markets (even if it is a global viral pandemic).

Up until a few days ago, markets were shrugging off the COVID-19 data because the rising case numbers were not seen as impeding any statewide reopening efforts. Moreover, government officials at the federal, state and local levels have been remarkably consistent, saying that unless the coronavirus numbers get significantly worse, there won’t be another widespread economic shutdown.

Then, Friday morning, Texas Gov. Greg Abbott (no fearmongering politician by any stretch of the imagination) decided to roll back some of his state’s reopening plans amid a surge of new infections. Gov. Abbott has now moved to limit restaurants to 50% capacity and require bars to close at noon except for delivery and takeout.

“At this time, it is clear that the rise in cases is largely driven by certain types of activities, including Texans congregating in bars,” Abbott said in a statement. He also said most outdoor gatherings of 100 or more people would need approval from local governments.

Now, that qualifies as a material fear of a renewed government shutdown, and hence the early Friday risk-off selling of more than 2% across the board.

The silver lining here, if there is one, is that while the increase in new coronavirus cases could delay an economic return to “normal,” the renewed fear of increasing lockdowns is going to convince markets that the multi-trillion-dollar government stimulus now on the table will be signed into law. That means an extension of unemployment benefits, other loan programs and other direct expenditures designed to shore up this COVID-19-challenged economy.

As for our holding, there has been a sustained move higher in our Tactical Trends Portfolio (TTP), as all three of our holdings continue to deliver.

Our newest position, social media giant Facebook (FB), did see some selling this week, as many high-profile companies decided to make a political statement by choosing to boycott advertising on the platform. While this is not a good development for FB, it’s also likely a temporary blip on its advertising revenue radar. The reason why is because other companies likely will fill the void. Moreover, FB has a history of making ameliorating tweaks to it platform to placate advertisers, and I suspect this time will be no different. Continue to own FB.

Finally, the best week of any year is nearly here, and it is the week in which the largest gathering of free minds takes place. That week, of course, is the week of the FreedomFest Conference, the summit for the liberty movement.

This year will undoubtedly be unlike any other at FreedomFest, and the reason why is because 2020 has been unlike any other. Sadly, freedom has become somewhat of a forbidden value during this pandemic, a value that government-friendly forces and those who want greater and greater social control have exploited for their own gain.

Yet FreedomFest gives us a chance to talk these issues out amongst those who will actually preserve, protect and defend the moral and intellectual superiority of individual liberty, individual rights and the freedom of speech and thought that’s come under such vehement assault in recent years. And just like any powerful and successful movement, we’ll do it with the love, joy, laughter, fervor and intellectual passion deserved of the primary value that makes all other values possible — the value of freedom.

So, if you want to help preserve the bedrock value that is freedom, then you need to join me at FreedomFest.

This year, FreedomFest is being held at the fabulous Caesars Palace in Las Vegas, Monday, July 13, through Thursday, July 16. Come join me and more than 200 dynamic speakers, think tanks, filmmakers, business innovators, politicians, policymakers and best-selling authors — all gathered to exchange ideas and fight for the bedrock value that allows us all to pursue our own happiness.

I guarantee you’ll have fun while also celebrating, protecting and venerating your fellow freedom warriors.

To do your part, all you have to do is sign up for FreedomFest, book your room and make those travel plans. In other words, all you have to do is put on your bravest face and stand up for the prime virtue that is freedom.