Topley’s Top Ten – April 30, 2020

1.Sector ETF Changes Since 2/19 Highs.


This morning, we highlighted the recent performance of sector ETFs noting how Health Care has led the way higher rising the furthest above its 50-DMA.  Consumer Discretionary (XLY), Technology (XLK), Materials (XLB), Communication Services (XLC), and Consumer Staples (XLP) each had also risen above their 50-DMAs.  Given their outperformance, as shown in the table below, headed into today these were the sectors closest to their levels on the S&P 500’s last all time high on February 19th.  The Health Care ETF (XLV) actually headed into today less than 2% away from its 2/19 levels and XLP was also under 10% away.

 2.Americans Expect the Job Market to Improve in Next 6 Mos. But Not Planning Vacations or Car Buying.

A substantial percentage of Americans now expect an improvement in the job market in six months.

• Very few households are planning a vacation.

There was a record decline in the percentage of Americans planning to buy a car.

Source: @EPBResearch

The Daily Shot

3.Small Cap Joining the Rally.

Last 5 days small cap IWM +12% vs. S&P +5%….Remember small cap had its worst quarter ever Q1 2020.

4. TikTok Crosses 2 Billion Downloads After Best Quarter For Any App Ever

Social video app TikTok from ByteDance has been downloaded more than 2 billion times globally on the App Store and Google Play, according to Sensor Tower Store Intelligence estimates.

The latest milestone comes just five months after TikTok surpassed 1.5 billion downloads. In Q1 2020, it generated the most downloads for any app ever in a quarter, accumulating more than 315 million installs across the App Store and Google Play.

While the app was already popular and backed by a large user acquisition campaign, TikTok’s latest surge comes amid the global COVID-19 pandemic, which has seen consumers drawn to their mobile devices more than ever as they look for new ways to shop, work, and connect with others.

5.Morgan Stanley Most Hated Rally Ever

From Dave Lutz at Jones Trading

6.Re-Fi Applications Hit Highest Levels Since 2003.

This adds to “pent up demand” bulls thesis…Now add lower monthly mortgage payments

Applications for refi mortgages in the week ended April 24 ticked down from the prior two weeks and were down 39% from early March, but were still triple the volume of the same week last year. Refis accounted for 72% of all mortgage applications.

7.Why a decades-old TB vaccine is getting attention in the fight against Covid-19

By HELEN BRANSWELL @HelenBranswell

APRIL 14, 2020

A health care worker administers a dose of BCG vaccine to a newborn in Madagascar. REBECCA MARTIN/CDC

·       In the desperate search for ammunition to fend off the Covid-19 pandemic, a decades-old tuberculosis vaccine, given in huge numbers around the world, is gaining newfound attention.

Researchers in Australia and the Netherlands are testing the idea that the vaccine, known as BCG — short for bacille Calmette-Guérin — could have broad power to boost the immune system against the novel coronavirus. In the United States, a research group in Boston hopes to test the vaccine in frontline health workers for the same purpose.

The interest stems from multiple studies over a number of years that point to the vaccine as having what are known as “off-target” benefits.

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Exclusive analysis of biopharma, health policy, and the life sciences.

While the vaccine, used in many low- and middle-income countries, isn’t considered to be highly effective against its primary goal, TB, it seems to help the immune system fend off various pathogens, including one that causes leprosy. The question is whether the virus known as SARS-CoV-2 is among them.

Not everyone is convinced.

A leading TB researcher, Madhukar Pai, has warned that the BCG vaccine is unlikely to be the magic bullet some people seem to think it may be. Pai, director of McGill University’s International TB Center, wrote a blog post over the weekend arguing that people may be ascribing almost magical powers to the vaccine.

“I think the idea is 100% worth investigating,” Pai said in an interview with STAT. “That’s why my piece was not against further research. My piece was saying: Right now we’re nowhere close to anything for a policy based on ecological studies that are full of holes.”

The World Health Organization seems to agree. On Sunday it published a scientific brief examining the evidence surrounding BCG. It concludes that there currently is no proof the vaccine protects against the new coronavirus. “In the absence of evidence, WHO does not recommend BCG vaccination for the prevention of COVID-19,” it stated.

Still, some researchers are hopeful.

Denise Faustman, director of immunobiology at Massachusetts General Hospital, has been studying BCG for years as a therapy for type 1 diabetes. She has a stash of the vaccine — which is not used in the United States for tuberculosis prevention — and wants to see if it could benefit frontline health workers. She is seeking institutional permission to quickly mount a trial at Boston’s Brigham and Women’s Hospital.

“The goal is to enroll rapidly over a two-month period, about 4,000 high-risk health care workers. And then the goal will be to watch them … to see if we can get a signal,” Faustman said.

The word has gotten around among health workers in Boston. Faustman’s phone is ringing off the hook. “Certainly the people who want in the trial are calling every five minutes [to ask], ‘How do I get in this trial?’” she said. “We have hundreds of phone calls right now of ‘Why can’t I get this?’”

In some respects, the notion of using a vaccine designed to prevent infection with one pathogen to protect people from another, unrelated bug seems counterintuitive. You wouldn’t expect a flu shot to offer any protection against Covid-19, for instance.

But years of research has suggested the immune system boost that BCG confers applies far more broadly than to just Mycobacterium tuberculosis, which causes TB. Children vaccinated with it in low- and middle-income countries around the world have been seen to have lower death rates from other respiratory infections, for instance.

8.Korn Ferry and Fortune Rank 10 Most Admired Companies.

Fortune collaborated with management consulting firm Korn Ferry to survey 3,750 executives, analysts, and directors. They asked the survey participants to rank companies in their own industry on nine criteria: Innovation, people management, social responsibility, quality of management, use of corporate assets, financial soundness, long-term investment value, quality of products and services, and global competitiveness.

These, out of 1,500 companies, made it to the top 10 most admired companies list:

10- Salesforce

Salesforce is not just among the most admired, but also one of the best companies to work for. It provides customer relationship management software as well as tools for analytics, marketing automation, and application development. Salesforce has spent a little over $10 million to close the gender pay gap.

9- Costco Wholesale

Costco Wholesale has entered the top ten this year. It operates more than 800 warehouses across the United States, Canada, the UK, Japan, and Australia. It’s a members-only chain of warehouse clubs. Costco offers its members low prices on a wide range of products. Recently, Costco also became one of America’s ten largest e-commerce players.

8- JPMorgan Chase

The US banking and financial services juggernaut has once again earned a place among the world’s most admired companies. JPMorgan is one of the world’s largest banks with over $2.7 trillion in assets. It was formed in 2000 after JPMorgan’s merger with Chase Manhattan. The company provides investment banking, asset management, credit cards, and other financial services.

7- Alphabet

Alphabet is the seventh most admired company on the planet. It’s the parent company of Google, Android, YouTube, Waymo, and many other products and services. It is one of the world’s most innovative companies. But Google has been targeted in recent years by antitrust regulators and politicians who have accused it of using its might to kill the competition.

6- Starbucks

Starbucks has slipped from 5th to 6th position. Seattle-based Starbucks is the world’s largest coffeehouse chain with more than 30,000 locations. It represents the second wave of coffee culture in the United States and many other countries. Starbucks works directly with farmers to control the coffee production and distribution process.

5- Berkshire Hathaway

Berkshire Hathaway is one of the world’s largest conglomerates. It owns companies like Dairy Queen, GEICO, Duracell, and others. Warren Buffet’s Berkshire also holds large stakes in Coca Cola, Wells Fargo, Apple, and American Express. The holding company’s book value has grown at an annualized rate of 19% since 1965 compared to 9.7% for the S&P 500.

4- Walt Disney

Founded nearly a century ago, Walt Disney is by far the most powerful media and entertainment company in the United States. It owns Pixar, Lucasfilm, Marvel Entertainment, Hulu, and 20th Century Studios. Its Disney+ streaming service gained more than 10 million new subscribers in just a day after launch. It owns some of the best and most popular content in the world.

3- Microsoft

Microsoft has jumped three spots from last year to become the third most admired company on the planet. Microsoft’s Office suite, Surface laptops, Xbox consoles, cloud services, and other innovative products have made it a favorite of consumers, industry experts, as well as investors. Microsoft might have missed the bus on smartphones, but it is as relevant as ever in the age of smartphones.

2- Amazon

Amazon controls nearly 40% of the US e-commerce market. It’s also the leading cloud service provider on the planet. It also has a fast-growing online media streaming and smart speaker business. Amazon has seen explosive growth in demand amid the coronavirus pandemic. The Great Lockdown to contain the virus has forced people to stay indoors and order goods online. However, it has also been criticized time and again over the treatment of its employees and contract workers.

1- Apple

Apple has held the crown of the world’s most admired company for the 13th consecutive year, according to Fortune magazine. The Cupertino-based tech giant is also one of the most profitable companies on the planet. While Apple continues to innovate with iPhones, Apple Watch, iPads, and Macs, it’s diversifying into services. Over the last few years, it has launched a bunch of services including Apple TV+ and Apple Arcade. Apple is also a vocal proponent of user privacy.


9. 14 Things Every Wine Student Should Know

These lists tend to get a little silly, I admit. I recently saw a list in a wine article published by GQ which I found not just appalling, but outright offensive. And I’m usually the one who’s doing the offending. Anyway. I thought I could do better. I actually know I can do better. Let’s go.

14 Things Every Wine Student Should Know

1. The answer to every question you have starts with “it depends”.

2. There are no definitive lists.

3. Get comfortable with your ignorance.

4. Forget about what you “like”. It will not help you learn about or understand a wine.

5. Points do not matter. This is one thing about wine I will say definitively.

6. The best wine app you have is your camera roll. Take a picture of every bottle you drink.

7. If your goal is to serve wine and educate others, spend as much time talking to non-wine people about non-wine things as you do tasting and reading. The more you know about the world outside of wine, the more easily you can relate wine to other things that people actually are familiar with.

People like things that they are familiar with, and they will listen to you.

8. Do not for a second believe that being talked down to by a wine person who you think knows a lot is appropriate or normal. The best people in any field do not do this.

9. Nothing smells and tastes more like the wine than the wine itself.

10. Don’t get carried away or too focused on tasting notes. Sure, they’re fun. But see #9.

11. Your goal should not exclusively be to be a great blind taster. Blind tasting is effective because it can tell you a lot about yourself. It can let you know when your perception has been influenced by a label, a trend, or by other people, and it can be a barometer for your familiarity with certain wines and regions. Keep in mind, however, that many great wine people are not great blind tasters, and that the opposite is also true. There’s a lot more to it.

12. Always consider whom a wine is made by, by whom the wine producer is owned, for whom the wine is made, and what the economic motives of the producer might be.

13. Popular wines are not always good wines. This does not mean they are always bad either. Flies are attracted to honey, but they are also attracted to shit.

14. No one list about wine will ever be sufficient. Learn from as many sources as you possibly can.

Keep on learning. If you try hard, drink, read, drink, read, and seek to understand,

you will be great.

10. Skills Good Leaders Need.