Posted on July 16, 2020
Fellow Jews! Loyal Noahides!
This week’s installment of A Jew and His Gold is brought to you by Mutual of Omaha’s Wild Kingdom.
Because only Marlon, Jim and Stan would be able to corral the bestial worst that’s about to be unleashed on the world.
May G-d help us.
Dow Theory teaches us that any spike in the Industrials that’s not confirmed by the Transports – or better yet, is not led by them – is very likely to be short-lived.
And that’s precisely what’s presenting today.
Since bottoming in March, a strong rally on the Dow outpaced the transport sector by a longshot. And unless that changes, this move’s days are numbered.
That said, we’re in the midst of an Extraordinary Popular Delusion, so just about anything is possible. Including overbought transport stocks!
Yes, there are a few outfits making a good living off the lockdown – mostly delivery companies that are still moving all that online merchandise (UPS,SAIA) while the major airlines remain in sick bay and the remaining global shippers have been saddled with a crushing loss of demand.
That said, our take on those few stand-outs is now negative. We don’t believe in the likelihood of another lockdown leading to a) more discretionary money or b) more buying.
It’s just not going to happen – regardless the number and size of the next Federal stimulus checks.
Someone is going to take a hit.
And it’s very likely going to be those same outfits that benefited on the first go-round.
Many happy returns,