The J&J Shot Halt Is a Short-Term Speed Bump (If You Invest the Safe Money Way)

The market’s relentless, multi-month rally has been supported by three powerful pillars:

•  Enormous amounts of cheap, easy money from the Federal Reserve.

•  Wave after trillion-dollar wave of stimulus from Washington.

•  An accelerating COVID-19 vaccination effort and expectations the economy would soon return to “normal” as a result.

On Tuesday, that third pillar shook ... and equity indexes wobbled. The pressing question for investors is whether something worse could follow.

Let’s start with the news. Federal health officials halted shots of Johnson & Johnson’s (NYSE: JNJ) one-dose vaccine after a handful of recipients developed an extremely rare blood clotting disorder.

The Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) said six women developed clots and that experts would immediately convene to figure out why and what to do next.

That number — six — is important. It’s extremely small relative to the almost seven million U.S. residents who have already received the J&J shot.

We also don’t know whether the adverse events are related to the vaccine. Plus, even if that proves to be the case, regulators may decide the very small negative risk of complications is outweighed by the large positive benefit of beating back COVID-19.

That’s what British and European regulators concluded about an AstraZeneca PLC (Nasdaq: AZN) vaccine in use over there. It, too, may be linked to an extremely low number of adverse reactions. But they weighed the costs and the benefits associated with pulling the vaccine and decided against doing so.

Here’s another thing to keep in mind: The other two vaccines in widespread use here rely on a different technology. So, this order does not impact the Moderna, Inc. (Nasdaq: MRNA) and the Pfizer Inc. (NYSE: PFE)/BioNTech SE (Nasdaq: BNTX) shots.

Those other two vaccines are also much more widespread. Almost 98 million Pfizer shots have been administered, while 85 million Moderna jabs have gone into arms. That means the loss of J&J supply is more of a speed bump than a brick wall for the vaccination drive.

What about the other two pillars underpinning markets?

Well, this news certainly won’t prompt the Fed to hike interest rates or dial back quantitative easing any sooner. And it won’t push the Biden administration to backpedal on infrastructure or other spending. If anything, it could have the opposite effect.

The news is disappointing from a public health standpoint. But it’s not a crushing blow to markets, nor should it impair economic activity. So, my advice remains the same: Stick with high-yielding, high-rated “safe money” stocks.

Make sure you retain a reserve of cash and short-term Treasurys for safety.

And continue to invest in gold, silver, mining shares and cryptocurrencies. Assets protect against rampant central bank money-printing as well as government borrowing and spending.

That’s how to emerge from all of this ... with your wealth intact.

And you just might come out of it a lot better off.

Until next time,

Mike Larson