U.S. EQUITY MARKETS: NEW ABNORMAL


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Today’s U.S. stock market is “maybe the second most overvalued market I’ve ever seen,” according to David Tepper, billionaire founder of the Appaloosa Management hedge fund.
A number of high-flying tech stocks such as Alphabet, Amazon, and Google are “fully valued,” he added, meaning their stock is not worth more than their current prices.
“There has been misallocation of capital in pockets in the market,” he noted. In part because the U.S. Federal Reserve has made cheap money available for investors to play with, “the market is, by anybody’s standard, pretty full.”
He added even though the market has rallied from its mid-March lows, “that doesn’t mean you can’t fall significantly from these levels.”
The Dow fell 500 points on 13 May, shortly after Tepper made his comments in a CNBC interview.
Shot in the Arm
As noted above, ignoring the disastrous economic fundamentals, yesterday’s 911 point market spike was attributed to the hope a COVID-Killer vaccine would soon be on the market.
This has been an ongoing market-hyping sales pitch.
Prior to yesterday’s market opening, Fed Chair Jerome Powell proclaimed on CBS “60 Minutes” that the strength and speed of the U.S. economic recovery could depend on the development of a vaccine against the COVID virus.
“Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of the year,” Powell said. But “for the economy to fully recover… that may have to await the arrival of a vaccine,” he added.
In a separate interview, Gary Cohn, former director of the National Economic Council in the Trump administration, emphasized the need for both a vaccine and the urgency of restarting the economy.
TRENDPOST: As we continue to note, totally absent in the media, which keeps selling the “vaccine solution,” is for people to get in better physical and emotional shape and build up their immune systems.
Also unmentioned by the sellers of COVID Fear and Hysteria is that people dying from coronavirus are chronically mostly ill elderly and those with pre-existing health disorders.
For example, among the virus deaths in New York, the hardest hit state, according to JAMA, a peer-reviewed medical journal, “The most common underlying conditions were high blood pressure (56.6%), obesity (41.7%), and diabetes (33.8%). Median Charlson Comorbidity Index (CCI) score was 4 points, which corresponds to a 53% estimated 10-year survival and represents a heavy burden of underlying disease.
More Made Up Rules
The New York Stock Exchange will reopen its trading floor on 26 May after being closed since 23 March.
The exchange will permit entry to only a limited number of traders, who must submit to temperature checks, be masked, maintain a six-foot social distance, and refrain from shaking hands, high-fiving, and other “unnecessary physical contact,” said the three-page memo detailing the requirements traders must meet.
Also, traders coming onto the floor will have to attest they did not take public transport to get there.
CBOE, which operates an options trading pit in Chicago, is planning to reopen its trading floor on 1 June, the day after Chicago’s lockdown order is due to expire.
CME Group, which has futures and options trading floors in Chicago, will open its trading areas in stages that begin at least three weeks after the city’s lockdown ends. Traders entering the pits will be required to sign a waiver acknowledging they understand the risks of catching the COVID virus on an open-outcry trading floor.

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