Transcript:
Hello, everybody, welcome to Tuesday, unfortunately, S&P 500 was down about .7%. But again, it had company, the Dow was down about .8%, the NASDAQ up down about .9%. The Russell 2000, the small cap index was down almost 2%. Today, you know, so So why is this happening? You know, we’ve had now two days in a row where the markets kind of come down. And really, if you look at what’s going on, and you look at when the market kind of reacted to different pieces of news, I think it can trace it back to a few things, all of which has to do with the reopening.
So number one: Europe has decided that they are recommending that they put a warning label for the blood clots on the Johnson and Johnson vaccine. So that was one piece there. Because obviously, the vaccine is super important. India has had a pretty big surge all of a sudden coming, and they’re talking about the possibility of further lock downs. And, you know, United Airlines came out with their earnings report, it wasn’t what people were hoping for, they gave some good guidance in the future, you know, kind of what they see coming. But the market sold off at 9% off on United Airlines.
So, you know, bottom line is just a situation where the back of the virus has been around for a long time, the vaccine is on the way, and you’ve got kind of this COVID fatigue, and people are just out, you know, whether they’re supposed to be locked down or not. In some places, they’ve allowed, you know, more freedom, and then combine that with this new variants that are out there, specifically, the UK variant that seems to be much more contagious, and you have a case count on the virus that’s going up, of course, the markets looking at that and say, “Hey, we’re not gonna be able to reopen as soon as we thought of those types of things.” So definitely, this is not going to be a straight line. And this is sort of a different investing environment, we have to have pretty much extreme patience, you know, because there’s not money being made on any one side of the equation, you just have to be patient to keep investing in these reopening stocks is very simple.
For me, if you look forward 6 to 18 months from now, are things going to be better in or in this area of the reopening? I think so. I mean, it’s possible that it’s not obviously anything can happen. But I believe that, you know, the virus count will be down quite a bit over the next 6 to 18 months, because the vaccine is going to become more prevalent. And and I believe that the amount of revenue and the amount of spending that’s going to come out is going to be higher than what’s expected. I think this pent up demand, combined with the actual money sitting on the sidelines is going to drive things. So again, I think you just keep accumulating.
And I’ve said this before about these drops, very important sometimes to rallies often start off with some of these drops. If you look at what happened back in October, you know, we had a pretty big downturn, the S&P 500 came down almost 10% from that high point, and right to the end of the month. And it got down to a point where you know, people were willing to buy and we ended up with one of the biggest rallies I’ve seen, you know, from the end of October, really till the middle of February. And so you know, we’re now backing up a bit, it’s been very soft, really since the middle of February. That’s normal, we’ve had a huge run up.
And so now when you get this little back up again, again, at 9% drop on United Airlines, somebody is going to come in and decide that’s a good buy, you know, you cruise lines are down all these things, you know, so there’s an opportunity to buy some of these different stocks that I think are going to benefit from this reopening. just not going to happen right away, which is exactly what you want. You want to be able to accumulate now these low points. So I think you know this, again, just a period of time, a little bit of a different investing technique here that requires some patience. And so will you know keep keep this rolling and see where this goes. So look forward to talking to you tomorrow. Thank you very much.