What Will Happen When Ebola Vanishes from the News?

A highly infectious virus that can kill up to 90% of the people who catch it.

That’s how Doctors Without Borders characterized Ebola back in August, when roughly 730 people were estimated to have this highly fatal disease.

At the time, the Centers for Disease Control and Prevention estimated that there had more than 2,000 Ebola deaths since the disease was identified in 1976.

According to more recent reports, nearly 10,000 people have contracted Ebola in 2014 alone, with the death toll approaching 5,000, according to the World Health Organization.

And those are just the reported cases.

All this frightening news continues to set off waves of panic and alarm.

On Thursday, for example, the markets were enjoying a nice run-up until news broke that the epidemic had found its way to New York.

Although the markets finished positively that day, traders who were paying close attention could see that the market was visibly shaken by the news.

And no wonder, really. But … what if this crisis ends even faster than it began?

Obama is irrelevant!

According to a recent story on USA Today, Democratic Senate candidate Mark Begich of Alaska has gone so far as to say, “The president’s not relevant. He’s gone in two years.”

Mr. Begich is the one candidate who has the nerve to state the obvious. President Obama is looking at a lame duck Presidency over the next few years, and after these elections I would be very surprised if he gets anything accomplished at all.

How will that impact the upcoming miderm elections? Find out here >>

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Feathers Flying on Wall Street

There’s no question Ebola fears have been a factor in the recently volatile trading action in the broader market indices.

Conspiracy theories and assertions made by politicians that a government cover-up had taken place only served to fuel the volatility.

Consider that the Dow Industrials dropped as much as 460 points during a single trading session, and that 200-point intraday swings are becoming a norm.

I’ve shared my father’s advice in the past in this space:

The best times go buy are when the feathers are flying.

Clearly, the feathers have certainly been flying.

The Ebola crisis in West Africa has set off a cacophony of misinformation, rumors and false narratives by intense media sensationalism.

That’s because, as I pointed out in my July 15 article, “Don’t Let Doomsayers Distract You from the Next Bull Run,” news and opinion are not immune to advertising dollars.

False alarms on trains, buses, cruise ships, airliners and people running into emergency rooms induce panic that more victims may be infected and threaten the population.

No wonder the Dow has been running up and down.

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Yes, the market has swung wildly because of other factors like the Islamic State, concerns over disinflation and double-dip recession, too much oil supply, etc.

James Comey
FBI Director James B. Comey

Nevertheless, we as Americans have freaked out … and that’s the core reason the markets have pulled as far back as 9% in recent weeks.

As a result, oil and oil services stocks are down as much as 60% … and unfairly so.

James B. Comey, the director of the FBI, put one of my two biggest fears — Ebola terrorism — to bed. When asked by a FOX news reporter about the risk of Ebola terrorism, Comey responded with a definitive one-word answer:

“No.”

You can say whatever you want about Washington or the U.S. government. (And we certainly have a few thoughts about President Obama and the upcoming midterm elections.) But Comey’s integrity seems to be beyond reproach. The Senate seems to agree, as it confirmed him as FBI director by a 93-to-1 vote last year.

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Comey may be right. The U.N. health agency officially declared an end of the Ebola outbreak in Senegal; a similar announcement from the World Health Organization for Nigeria is expected very soon.

The borders of neighboring countries may very well help contain and limit infections until the current crisis runs its course.

Closing borders in Africa makes sense because the lack of medical infrastructure capable of providing the needed medical care for Ebola infections throughout Africa.

The borders of neighboring countries may very well help contain and limit infections until the current crisis runs its course.

Closing borders in Africa makes sense because the lack of medical infrastructure capable of providing the needed medical care for Ebola infections throughout Africa.

Despite the mishandling of the Texas case of a Liberian national living in Dallas, Thomas Eric Duncan’s death on Oct. 8, led to the infection of two nurses.

But let’s put this into perspective here …

Right now, including the New York doctor who just returned home from Guinea, there have only been four reported cases in the United States.

In another two weeks, assuming none of those individuals being monitored here in the United States develops the disease, the risk here in the States could evaporate and begin to fade from news and public concern to Wall Street and the rest of the world’s financial markets.

If this takes place as we enter the usual bullish seasonality of November and December, it’s entirely likely that we’ll see both the Dow and S&P 500 recover their losses.

We could see the end-of-the-year highs near 17,350 for the Dow and 2,018 for the S&P 500, respectively.

Best of all, we would finally see traders, investors, travelers and other citizens finally breathing normally again.

Always Watching Your Chickens,

James DiGeorgia

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