Stock never had a chance yesterday as market commentators pounced early pre-opening weakness helping to trigger a perfect storm of fear.  The lower the market declined the greater the fear.  The greater the increase in fear the more the market declined.

Ultimately, its fine for the market to pullback. Major corrections and crashes ae going to happen, but the extra effort to push the market over the edge is disturbing.

Be that as it may, the rally since March 23^rd has been so amazing it created a general feeling the market was due to pullback.  I have been worried about other things beyond an uptick in Covid-19 cases, which should have been expected. 

The news is worrisome, but it will also lead to a quicker self-correction among the public and more people will wear mask, social distance and avoid small crowded in-door facilities.  Numbers will rise for a another few weeks, then peak. As they come down, perhaps, they will inform a bull case.   

I want to see wider participation on up days, and we need to hear about the next round of stimulus.  I think it’s a huge mistake to turn off the spigot.  Folks saying people are saving stimulus rather than spending it don’t get the reason for that is people think it’s a one-shot deal.

Portfolio Approach

Yesterday, we took profits in Communication Services and Technology and raised Cash to 15% in our model portfolio.  We love the Communication Space, but lots of great names got too expensive. We are going to populate soon. If you are not a current subscriber to Hotline, contact your account representative or email Research@wstreet.com. 

Today’s Session

Initial Jobless Claims

Saw its twelve consecutive decline and dipped under 1.5 million.  The street was looking for 1.32 million, but 1.48 million is a long way from the 6.867 peak in March.

Continuing claims finally eased under 20 million, but the rate of change is stubbornly slow.

Watch Financials

With the new stress test debuting after the close, watch the action in bank stocks today. 

The big analyst calls for the morning comes from Berenberg, which slapped a “sell” rating on Boeing (BA) and share price target of $150.