Hey Influence Traders,
I hope that everyone had a great Christmas holiday.
Like many families, our plans were cancelled when the entire lot of us came down with COVID.
While a pain in the you-know-what, I can officially say that Omicron was like a bad cold.
My symptoms were definitely worse when I battled the virus for the first time 18 months ago.
Will Pills Be the Vaccine of 2022?
Over the holidays, the FDA authorized a second COVID-19 pill.
Merck (Ticker: MRK) now joins Pfizer (Ticker: PFE) with an available treatment.
The MRK pill is, however, more limited than PFE.
The MRK authorization is for high-risk adults “for whom alternative COVID-19 treatment options authorized by the FDA are not accessible or clinically appropriate.”
The reason for the limited approval is that while the PFE pill was shown to reduce hospitalization or death in high-risk patients by 89%, the MRK pill is just 30% effective.
I guess 30% is better than nothing.
An FDA spokesperson clarified that the “authorization provides an additional treatment option against the COVID-19 virus in the form of a pill that can be taken orally.”
I’m just glad they qualified it as to be taken orally!
Shopping UP
COVID certainly did not stop shopping this holiday season.
Good retail sales numbers gave the S&P 500 a nice post-Christmas Santa rally yesterday.
The index hit a new high of just over 4,791.
Not All the News Was Rosy
In the past three days, more than 15,000 flights have been delayed or cancelled.
While COVID absences are getting the majority of the blame, maintenance issues and severe weather contributed.
This is a blow to airlines that were staring at the busiest travel season in two years.
This has caused Dr. Fauci to renew calls for mandatory vaccines for ALL air travel.
While all illnesses should be taken seriously … the family and I all agree that Omicron was a bad cold.
Inflation Still Looming
Despite the good market news, inflation is still looming large on the horizon.
President Biden is not happy about it and is looking to combat inflation concerns.
One tool in his arsenal is the Federal government’s antitrust powers.
Biden strongly believes that a lack of corporate competition is to blame for supply chain and pricing problems.
In July, Biden issued an executive order that included 72 directives for cabinet and independent agencies to more vigorously enforce antitrust laws and to pursue specific actions to promote competition.
The antitrust crackdown will come in traditional and not-so-traditional areas.
A few months ago Biden ordered a review of oil and gas pricing practices.
As gas prices rose, he ordered the Federal Trade Commission to investigate oil companies for artificially inflating prices.
Recently, he had the Agriculture Department investigate large meatpackers that control a significant share of poultry and pork markets. He has accused them of raising prices, underpaying farmers, and gauging profits.
The Agriculture Department has distributed $500 million to help seed (so to speak) new entrants in the meatpacking industries to challenge the small group of corporate giants that dominate it.
Agriculture Sec. Tom Vilsack is now in the spotlight.
He held the same position for eight years under the Obama administration.
Many have accused him of being non-responsive to antitrust efforts.
During his prior tenure he oversaw consolidation of industry giants like Monsanto (Ticker: MON) and Bayer (Ticker: BAYRY).
When he left the Obama admin he became a dairy industry lobbyist.
Progressive groups expect Vilsack to strengthen the Packers and Stockyards Act of 1921, which protects farmers from anticompetitive practices in the meat industry.
But, as in the past, he’s yet to announce any such rule changes.
Some things NEVER CHANGE!
Likewise, the president has pushed the Federal Maritime Commission to search for price gouging by large shipping companies at the heart of the supply chain complaints.
Biden has filled his cabinet with antitrust hard-core crusaders like Lina Khan, the chairwoman of the FTC, and Jonathan Kanter, an adversary of Facebook (Ticker: FB) and Google (Ticker: GOOGL), to lead the antitrust division of the Justice Department.
Tim Wu, a proponent of breaking up FB and other large companies, was brought on as a special White House adviser.
Antitrust enforcement is only going to grow.
Given the gridlock on the Hill and the potential for Democrats to lose one or both houses in the mid-term elections, Biden can use executive actions to force anticompetitive crackdowns and advance his economic agenda.
If you can’t figure out how to use one-party majorities, figure out how to work around them.
Cutting through the noise for you,
Frank
