(New York Post) Investors have a way of sniffing out the truth, and what they’re sniffing now in terms of COVID-19 is far from the doom-and-gloom, long-dark-winter scenario we keep hearing from many politicians, most notably those in New York.
Instead, there’s a fair amount of sunshine on Wall Street these days about the country’s future and the likely end of the pandemic in a few months.
How do I know this? Money managers are telling me their biggest clients have been increasing their exposure to stocks since October.
Yes, COVID caseloads are mounting, schools are going totally remote and some state governments are now instituting new lockdowns on businesses, whose closures have wobbled the markets.
But some of the smart money also believes hope is on the horizon. Outside of New York, Michigan and California, there’s also broader governmental resistance to full lockdowns because of the public backlash.
Meanwhile, our hospitals aren’t being overrun as they were at the beginning of the pandemic, and people are surviving COVID. Powered by low interest rates and trillions of dollars in stimulus, the economy and the markets can bob and weave their way through a winter that won’t be so dark.
“I just put another couple million to work,” a money manager who runs a multibillion-dollar fund told me. “Clients are buying the dip.”
Or maybe people who make money looking at the world without political blinders know something the hyperventilating pols don’t want to admit: That the end of the pandemic is coming spurred by a highly effective vaccine.
Don’t take my word for it. Larry Fink of BlackRock recently told employees in a post-election town hall on Nov. 4 that markets are upbeat on the prospect of a Biden presidency, a GOP Senate and a slimmer Democratic majority in the House. Divided government means pols can’t do anything stupid like raise taxes during the pandemic recession.
He added that a vaccine would likely be widely distributed by the second quarter of next year, a boost to the economy and the markets:
“We are going to have antivirals and we are going to have therapies that work. I am confident that we will have a medical solution.”
Fink, of course, isn’t an epidemiologist. But he runs the largest money manager in the world, with $7.4 trillion that flows into vaccine producers like Pfizer and Moderna.
Days after his remarks, BlackRock disclosed that it had increased its position in Moderna stock by 2 percent, bringing its total holdings to $1.4 billion.
Of course, Fink could be just “talking his book,” Wall Street jargon for promoting a position. A more realistic view is that he has “skin in the game” and has a lot to lose if he’s wrong.
Fink, of course, is one of Wall Street’s top Democrats, so you won’t see him on TV saying that things are more likely to get better than worse for the pandemic, the economy and the markets. That would mean he would have to give some credit to President Trump for the stimulus that has kept the economy from falling into a COVID depression and for making a vaccine a realistic possibility sometime soon.
But people like Fink have a way of seeing through the daily hysteria of headlines and politicians. Markets, as I’ve pointed out in this space, were much more skeptical of the Blue Wave theory in the polls that predicted a massive Dem sweep. They accurately sniffed out that Trump would make the election close and the GOP could do well down the ballot.
They were right about the election. Let’s hope they’re right about the pandemic.
