Written by Michael Forrester – Founder, President, and CIO of High Note Wealth
It’s Fri-YAY, High Note friends. We hope your weeks were as fulfilling as ours. This week we are keeping the note very short. No need to unnecessarily bend your ear as we sit in a transition point. Or maybe it’s an inflection point? Not sure the proper usage there, but let’s just say that this week feels very much like a wait-and-see time in the market.
As we discussed last week, the re-opening “woohoo! trade” that seemed to be taking off with the vaccine news stalled shortly after departure. It wasn’t a crash landing, but rather the plane is gently gliding while losing altitude. The factors determining the fate of this plane are the fun things we have been dealing with all year.
VAX: Yes, the vaccine news is very positive with Pfizer turning theirs over to the FDA for approval and Moderna right behind them. Timing you ask? Unfortunately, we just keep hearing the same benign thing over and over that goes something like this: “it could be sooner than you think…essential health care workers will be first in line…ultimately distribution will be up to each state…” Not helpful.
STIM: Better news this week on a possible stimulus package. This could totally be a tease, but we did hear that Senators Schumer and McConnell have expressed willingness to open discussion on a new stimulus deal. Yes, we know, if you are keeping score at home you know this is us getting excited about a leak to the press that they may talk. The Senators are willing to maybe talk. Which is kind of their job anyway. Not exactly a solid foundation on which to build a castle, but it’s a better tone from the two sides than we have heard in weeks.
CASES: Yikes. Cases, hospitalizations and most any metric you can look at right now looks more like May than August which is not good. The trend is up and the lockdowns are following closely behind. Some places have put restrictions back in and some are sticking with everyone’s favorite, “it’s not illegal, but it is frowned upon.” We know that in the 4-6 week timeline after said lockdowns we start to see the economic ramifications by way of jobless claims, etc.
It’s these three things that have the central focus right now. Finally, this week it really started to feel like the momentum in the recovery was unwinding and could roll over. So, we watch and wait, ready for whatever direction is next.
We are doing some end of the year portfolio clean up and trading. We will have more details on that next week. Also, if you are ordering pizza this week, may we suggest Domino’s? If you aren’t familiar, Domino’s Pizza is an American multinational pizza restaurant chain founded in 1961. The company stock is publicly traded under ticker DPZ. Word on the street is their pizza is “reliably good given its price point and convenience.” Anyways, more on that next week 🙂
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Amazon Rx, Future Drug Trafficker
On Tuesday, Amazon announced they were rolling out their prescription drug business for customers around the country. Well, almost the country as there are 5 states missing from the roll out (yes, Minnesota is one), but you get the point. Bezos and crew have been circling around this business for quite some time with their first big move being the purchase of online pharmacy, Pill Pack, two years ago. This move into the health care space is one of the many reasons that we have been and continue to be overweight on Amazon stock.
The diversification within the business lines of the company is staggering, breaking the old axiom of “do only one thing and do it well”. In addition to providing new rapid growth opportunities for a very grown up company, it keeps discussions of anti-trust laws at bay. It’s almost like that’s not an accident.
Whether Amazon can truly be successful in grabbing market share in the prescription space remains to be seen but it’s difficult to bet against them. After the announcement, traditional pharmacy stocks like Walgreens and CVS took a big hit. The battle lines have been drawn.
This story reminds me of a joke by the late, great Mitch Hedberg. “I like the FedEx driver because he’s a drug dealer and he doesn’t even know it.”
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