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“The World Will Have To Live With Covid Forever”

These are the stark words of Covid Vaccine maker and Moderna CEO Stephane Bancel on Wednesday when he spoke at the JPMorgan Healthcare Conference.

While many have guessed this to be the case for months… To see the leader of one of the major vaccine creators say is a gut punch.

The exact quote came in a warning from Mr. Bancel after a reporter asked the following question during the conference.

Public health officials and infectious disease experts have said there is a high likelihood that Covid-19 will become an endemic disease, meaning it will become present in communities at all times, though likely at lower levels than it is now.

Moderna CEO Stephane Bancel appeared to agree Wednesday that Covid-19 will become endemic, saying “SARS-CoV-2 is not going away.”

“We are going to live with this virus, we think, forever,”

Exchange above is from an article from CNBC.

I warned about this last week…

The vaccines will help some… But how long will that take?

Cities and states are far behind the 10 million estimated to have been vaccinated due to the mammoth logistical problems of producing, manufacturing, distributing, and giving the vaccines.

An estimated 50% of people don’t want the vaccine.

And even if they do get the vaccine, the new “highly infectious strain” of the virus making its way around Europe and the US – according to some experts the vaccine may not protect against this new and more deadly strain.

And more news broke this week that the newly mutated strain out of South Africa and Brazil called E484K that has already spread to 12 other countries could be more resistant to current vaccines.

Penny Moore, associate professor at the National Institute for Communicable Diseases in South Africa, called the mutation “alarming.”

“We fear this mutation might have an impact, and what we don’t know is the extent of the impact,” she said.

E484K is called an “escape mutant” because it’s been shown it might be able to escape some of the antibodies produced by the vaccine.

“I’m worried,” said Alex Sigal, a virologist at the Africa Health Research Institute.

The above is via CNN.

Last week I told you how the rapid rise in new cases and deaths from Covid were straining the health systems of various states and cities.

You can view that article here – What To Watch This Week As Covid Rages.

But this week I want to focus more on the economic impacts that will roll over into your investments.

Here’s what I said about this in the last couple weeks before we get to today’s update…

When the pandemic began in March 2020, we saw job losses at a historically unprecedented level.

In total 22 million jobs were cut in the first two months of the pandemic alone.

And an estimated 51 million jobs were lost in total.

This led to massive unemployment… Which led to bankruptcies, pay cuts, trouble paying mortgages and bills, and led to an almost complete stop of the world economy.

Things were so bad in the early stages of this pandemic that 4 in 10 US adults said either they or someone in their household lost a job or had to take lower pay at their job due to the pandemic.

And this led almost half of US adults in the “lower income” bracket to “having trouble paying their bills.”

A full third of American adults said they had to use money from savings or a retirement account just to pay their bills during the pandemic… Which puts people into an even tougher spot.

This led food bank usage to be at its highest level since The Great Depression.

We then began to slowly recover in the late Summer to early Fall…  But then coronavirus cases began exploding… And are still exploding as of this writing.

I’ve talked about this in recent weeks as you can read in the following articles…

Fortunately, the stimulus checks have begun arriving in American’s bank accounts. And this brings much needed relief for many of us.

But our lords and ladies in Congress deemed fit to only give each American $600… While better than nothing its peanuts compared to the hardships many faced due to the pandemic.

An amount that will barely cover half of someone’s normal monthly expenses…  If they don’t have kids.

To make things worse, economists and analysts are now projecting that on Thursday January 7th and Friday January 8th when the latest unemployment and job loss data is released that the US could see its first monthly job losses in 7 months.

Combine this with Covid cases still exploding, deaths still in the thousands per day, and more lock downs, business closures, and job losses enacted by our cities and states, and things are getting worse economically.

Unfortunately, the US did lose jobs in December for the first time since April 2020.  But it was even worse than analysts expected.

Analysts expected a potential small job gain of 50,000 or a small job loss of 50,000 in December.

Instead, we lost 140,000 jobs.

This is a horrific sign for the economy going forward…  And it’s a reinforcing cycle.

As Covid cases and deaths rise, more lockdowns are instituted.

As more lockdowns are instituted, more jobs are lost.

And as more jobs are lost, the economy gets worse.

This could pop the extreme bubble that’s building in the markets right now with the likes of Tesla gaining $60 billion in market value in one day.  Or about the same size as GM.

Unfortunately, things got even worse this week economically…

As more cities and states institute lockdowns, employment is getting crushed.

New weekly unemployment filings rose to their highest level since late August this week with 965,000 new claims filed.

Almost 12 million people are now on state or federal unemployment benefits.

An estimated one in six small businesses are expected to close their doors in the coming months because of the lockdowns and job losses.

And now 10 months into this pandemic the US has about 10 million fewer jobs than it did before the pandemic.

These are having massive ripple effects for the entire economy…

One example is for renters and landlords.

According to the Community Housing Improvement Program via Fox News, in New York City alone tenants owe more than $1.1 billion in back rent.

An estimated 19.4% of residential tenants are more than two months behind on their payments.

And landlords in the city are close to bankruptcy because of all this.

These are the kinds of ripples lockdowns, closures, bankruptcies, and job losses are causing nationwide due to the pandemic.

Eventually this will crush stock markets too.

As I’ve said privately to my friends for months now… “I don’t think this is going away anytime soon – if it ever fully does.  At some point we’re going to have to learn to live with this virus.”

Unfortunately, Mr. Bancel confirmed my suspicions last week.

You already know how to protect yourself… Here’s how I recommend you protect your retirement portfolio – because if the economy doesn’t get back on track soon… A major Bear Market is coming.

If you’re looking for the best way to protect your portfolio as the economy hangs in the balance…

Make sure you’re in great stocks that have the following traits…

  • They’re cheap
  • They have little to no debt compared to a lot of cash
  • They produce large profits and cash flows.
  • And make sure they aren’t in industries that could be hammered by more closures.

That’s what I’m watching this week… The continued rise of Covid cases and deaths… Combined with the continued economic deterioration.  So, I can better inform you going forward about how to protect yourself and those you care about in terms of your investment decisions.

Until then, use the following links to some of our recent articles to learn other ways to protect yourself and your investments in these uncertain times.

Disclosure – Jason Rivera is a 13+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above.

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