Transcript:
Tom Vaughan:
Hello everybody, welcome to Tuesday. The S&P 500 was down 1.9% today. There’s really a couple of major catalysts that caused this. In the morning, we had some news that the Moderna CEO said that the Omicron variant, because of the number of different mutations that has, might have some bigger impact on the vaccines, so might be a little bit less effective. And then we had the Chairman of the Federal Reserve, Chairman Powell, speaking in front of Congress, talking about cutting back on their stimulus even faster, because they’re seeing a very hot economy with with a higher inflation number than they’d like. Those two don’t go together, because you have one group of people that’s worried that the virus variant might slow the economy down. And then you have the Federal Reserve talking in front of Congress, talking about cutting back on the stimulus faster, which again, which cut the economy down even faster. And so that’s why you end up with a 1.9% negative today.
Now, if you look at that, and you kind of break it down. First of all, as far as the variant goes, so far, throughout this entire pandemic, no matter what variant has been, or how big the spike has been, we’ve seen some pretty good stock markets, especially in those stocks that operate really well within the environment of a pandemic. So in other words, airlines, and those types of things could definitely take a hit here. But your software companies, technology companies, and all these things that have done quite well could do quite well in this environment, still. Matter of fact, Apple for example, was up almost 3.2% today, even though the market was down, because they’re having fantastic phone sales in China, for example.
So, those are things that are still going on, the economy still is moving along, we’ll have to wait and see. And then the other thing to think about here is the fact that the Federal Reserve might be talking about cutting the stimulus back faster right now, because they’re seeing hot numbers. But if those numbers slow down, and economy slows down, and inflation slows down, they’ll make adjustments to their plan. And they’ve done really well with that so far, actually. So I don’t think they’re looking to try to bring all this stuff to a screeching halt.
So these are just comments that are happening. They’re important, as far as that goes. But it seems like there’s a high level of fear in these markets. And this is where you really want to be able to focus on kind of that positive news to kind of offset that. The BioNtech CEO, who’s the company that, you know, got together with Pfizer to make the other major vaccine, talked about how he felt that the situation would be okay for the vaccine, and especially in terms of serious illness. Of course, the news focused on the Moderna portion, because that’s kind of how it works. But so let’s see what happens with this vaccine before we start getting too nervous. Let’s see what the Federal Reserve does, you know, in response to that. So anyway, that’s what happened today. Very interesting. Really good times to be an investor in my opinion. The market is still I think, in a good spot altogether, so we’ll see how this plays out. Talk to you tomorrow. Thank you.