With super Tuesday coming, and Bernie Sanders getting ready to run away with the Democratic nomination, South Carolina threw a stick into the spokes of Bernie’s bicycle tires. Joe Biden won South Carolina as expected, but the margin of victory was much bigger than expected and poses a little bit of a problem for the Democratic socialist Sanders.  Joe Biden got 48.4% of the vote while Bernie Sanders only got 19.9%. Tom Steyer got 11.3% which caused him to immediately drop out after the race. Pete Buttigieg and Elizabeth warren didn’t even crack 10%, and one day later, Mayor Pete dropped out as well. “The truth is that the path has narrowed to a close, for our candidacy if not for our cause,” he said, adding “Tonight I am making the difficult decision to suspend my campaign for the presidency.” President trump immediately got on Twitter saying that all of Pete Buttigieg votes would go to Joe Biden, and if he’s right then it’s essentially a two-person race with Elizabeth Warren still involved but bringing up the rear. Amy Klobuchar is also still running but she is essentially dead in the water. Michael Bloomberg is still around, but he hasn’t gotten traction yet although he can never be counted out because of his money. The South Carolina primary is important because it was the first diverse state to vote for a Democratic nominee and Joe Biden not only won but he won by a large margin. Whether the Bernie Bros want to admit it or not, this is a huge problem going into super Tuesday. It is good news however for the stock market which does not by any stretch want Bernie Sanders to be president.      

Healthcare Stocks

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We never want to talk too much Bernie Sanders, but part of the selloff, whether anyone knows it or not was because of how well he was doing in the Democratic primary, especially the Healthcare Sector.  The (XLV:NYSE) which is one of the largest ETF’s representing the healthcare sector had started to roll over as Bernie Sanders did better and better in polling and in primaries. Bernie Sanders Medicare for all plan if passed which is unlikely would crush healthcare stocks. And in many polls, Bernie Sanders as the nomination for the Democratic Party beats Donald Trump. The polls definitely let everybody down in 2016, but that’s not something that people will bet their money on at this point. Again, his Medicare for all plan likely would not pass as it doesn’t even have full Democratic support let alone bipartisan support, but as we said earlier, people won’t necessarily risk money on that when there’s other sectors they can invest in. The stock market really hates Bernie Sanders, and seeing Joe Biden win South Carolina, even though at this point it seems like he would lose to President Trump is probably good news for the XLV. Biden doesn’t have a plan that targets health care companies like Medicare for all does, he wants to reinstate and expand Obamacare which was fairly profitable for insurance companies in hindsight. So, if the market recovers from the Coronavirus scare, watch the results of Super Tuesday and other primaries to see if Bernie still a chance has to get the nomination or not. If he doesn’t, the XLV might be a good short-term investment.      

New COVID-19 Cases and a Second Death in the U.S. 

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There’s been a second death from coronavirus in the United States, in the Seattle area and there’s been more confirmed cases in Washington state. Health officials in Washington said a man in his 70s with underlying health problems died on Saturday in Kirkland. That’s the same place where officials identified the first coronavirus death in the US on Saturday which was also a man with underlying health conditions but in his 50s. A third case was identified near Chicago IL , although it should be noted that the first 2 cases in that area were people who made full recoveries and have already gone home. A woman in Manhattan, was the first confirmed case in New York state and that’s troubling on its own given the mass of people in Manhattan. Who knows how many people she may have infected before being diagnosed? Florida declared a public health emergency and two health care workers in California tested positive globally the number of infections is now more than 88,000 and the total deaths are over 

Nonfarm Payrolls Data Will Be Huge This Week 

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The US Bureau of Labor statistics releases its monthly nonfarm payrolls report on Friday for the month of February. The average forecast is that 175K jobs will be added against a backdrop of 225K jobs added last month. There’s not expected to be any change in the unemployment rate and Yearly change in workers average hourly earnings is expected to drop by 0.1% from 3.1% to 3.0%. This matters more now than most months because the assumed slow down in the global economy caused by this crazy virus, has the markets pricing in 3 rate cuts including an over 90% chance of one of them happening in less than 2 weeks. If there is any surprise strength in the jobs numbers, but especially in wages, it will be harder for the Fed to cut rates as aggressively as the market wangs them too. But if there’s some weakness, things will get easier for the Fed.  This particular set of jobs numbers is also pretty important to President Trump, because again if the stock market keeps falling, he’s going to put more public pressure on the Fed to be more aggressive with rate cuts. That stuff does not sit well for his reelection hopes. The president is running for reelection on the economy and jobs, he needs the train to keep moving and the virus is acting like an anchor attached to the caboose of that train.  
The US Bureau of Labor statistics releases its monthly nonfarm payrolls report on Friday for the month of February. The average forecast is that 175K jobs will be added against a backdrop of 225K jobs added last month. There’s not expected to be any change in the unemployment rate and Yearly change in workers average hourly earnings is expected to drop by 0.1% from 3.1% to 3.0%. This matters more now than most months because the assumed slow down in the global economy caused by this crazy virus, has the markets pricing in 3 rate cuts including an over 90% chance of one of them happening in less than 2 weeks. If there is any surprise strength in the jobs numbers, but especially in wages, it will be harder for the Fed to cut rates as aggressively as the market wangs them too. But if there’s some weakness, things will get easier for the Fed.  This particular set of jobs numbers is also pretty important to President Trump, because again if the stock market keeps falling, he’s going to put more public pressure on the Fed to be more aggressive with rate cuts. That stuff does not sit well for his reelection hopes. The president is running for reelection on the economy and jobs, he needs the train to keep moving and the virus is acting like an anchor attached to the caboose of that train.