Wall St. caps best month in decades with broad sell-off

Even though the grim facts that the unemployment numbers have now topped 30 million and, as today’s expert says, we’ve seen “the worst economic data since the Great Depression,” there is nevertheless enough optimism in the market that both the Dow and S&P have seen their best monthly gains since 1987, and the Nasdaq its best since 2000.  Despite the fact that the indexes all took a modest dive today, the Dow losing 288 points, all the indexes are still better than 20% from their record February highs.  The consensus is clear: the slump is entirely the result of the lockdowns, the economy otherwise being in good shape, and so as soon as this emergency is resolved, jobs, business activity, consumer spending et. al. will gradually return to pre-pandemic normals.  How quickly this will happen is of course another question.  But Q1 is going better than expected.  236 S&P companies have reported and two-thirds have beaten estimates.  The Q1 earnings forecast has today been revised upwards from being 15.1% down yesterday to being 14.4% down today.  Volume remains fairly steady, today at 12.8 billion. 

Wall Street rallies on promising coronavirus drug

Just a few days ago the market crashed because the clinical trial in China of Gilead’s new COVID-19 drug bombed. Gilead claimed that the trial was invalid as it was ended prematurely. Today the NIH has announced that the drug shows great promise, something the great Dr. Fauci agrees with, and the market zoomed, the Dow up a big 532 points. There was never an explanation given regarding the Chinese trial but it appears that Gilead’s objections may have been legit just a few short days later.  As states gradually lift restrictions, small companies are seeing the most benefit which is also contributing to the rally.  And though the economy is sinking at “an unprecedented rate,” Fed Chair Powell says “the economy will pick up as restrictions are lifted.”  Q1 GDP has contracted 4.8% and Q2 is expected to be worse.  But good news:  192 S&P companies have now reported with 64% beating forecasts.  Volume seems to be steadying out now, today at 12.7 billion shares traded. 

Wall Street down on flight from techs; move to value limits loss on Dow, S&P 500

After opening nearly 400 points up, the Dow ended the day at a virtual standstill (a very modest 32 point loss) as the market rotated from traditional growth stocks to the cyclical stocks that have been most hurt by this crisis, encouraged by the hopes that the economy will begin growing again.  It’s one of those rare examples where optimism actually caused a sell off.  In just one day, the Q1 S&P forecast has been revised upward from yesterday’s 15% to today’s 14.8% down.  As expected, consumer confidence went into the toilet in April but this is expected to be short-lived given the assumption that the economy reopens carefully and does not cause another spike in infections and deaths.  We can only hope … but it’s a big assumption.  Volume was up a tad at 12.3 billion. 

U.S. stocks advance as some states reopen for business

The markets like the fact that the states have begun the process of reopening for business, as stated by today’s expert, “governors are taking the right steps and are measured and careful” but acknowledging that any market gains will be limited without forward motion in finding treatments and a vaccine.  Still there was sufficient optimism to boost the Dow 358 points, albeit with a very strong cautionary note – “If we start reopening tomorrow and there’s no big second wave, it’s still 6 months to a year to get back to normal.” So if everything goes perfectly, we have another year … and things rarely go perfectly.  The current forecast for Q1 GDP is a minus 4 percent.  The forecast for Q1 earnings is for a minus 15% from Q1 2019, a huge change from the January forecast of a plus 6.3 percent.  But this will be a big week with bellwether companies like Caterpillar, Google, Boeing, Facebook, Apple and Amazon (most of the FAANG) among others reporting Q1 results.  They will have a big impact on whether the index continues its recovery with all three now within 20% of their February record highs and the S&P on track for its best month since 1987.  Volume continues to decline, today at 10.6 billion. 

Succinct Summation of Week’s Events 4.24.20 (plus Covered Call Options)

Below find the usual Sunday night weekly summation, the big positive being that the markets are finally showing some signs of stabilizing (though whether this will last is anyone's best guess) and that jobless claims were less than last week, but still an horrendous 810K (thus the "lol" on it being a +).  The negative is a rerun from last week:  the number of foolish Americans who are defying the social distancing orders, thereby putting themselves, their families and the rest of society at risk. 

7 High-Paying Dividend Stocks in the S&P 500

For your reading pleasure this weekend, I submit the following contribution on the best dividend stocks per this week's edition of U.S. News Invested.  This is in conjunction with the excellent 90 minute AAII webinar held on Wednesday evening on the same subject.  For those of you who are on email distribution for this blog, I am attaching the PowerPoint presentation for that webinar to the email tonight. Tomorrow night, I will try to supply the link to the options webinar held Thursday evening.   For the rest of you, continue enjoying this sunny weekend.  And, despite the modest relaxation of restrictions, do continue to stay safe.

Tech titans Apple and Microsoft propel Wall Street rally

Today the market placed it bets on Apple and Microsoft turning in good Q1 reports next week as the two companies are seen as harbingers of the pandemic’s impact on the global economy.  The optimism shot the Dow up 260 points despite fears of a deep slump and jobless data now topping 26 million.  The S&P has now recovered more than 25% of the March low and the VIX is down for the third straight session.  Volume continues to decline, today at 10.2 billion, but there is debate as to whether this is because the panic is subsiding or investors are merely on the sidelines.  Q1 will tell. 

S&P 500 slips after report on coronavirus drug trial

Bad news from Gilead reporting its much hyped cure for COVID-19 failed in its first clinical trial limited the good news about falling unemployment claims and limited the Dow’s gains to 39 points after being up some 400 points earlier.  (Gilead claims the trial was invalid as it was terminated too soon.)  As today’s expert summed up, “The hope that Gilead could take the fear of dying off the table was less likely today.”  The S&P is now just 15% below its record high, an improvement of 17% from yesterday.  As expected, business activity hit new record lows in April but this is the same in Europe and Asia too.  Volume continues to decline, today at 11.7 billion. 

Wall Street surges as Congress preps more stimulus and oil bounces back

After two days in negative numbers, oil bounced today and so did the Dow.  That combined with another half trillion in stimulus for small business pushed the index up 456.  The S&P is now just 17% below its February record high.  Two companies have benefited from the lockdown – Mexican Grill and Netflix, both seeing respectively home meal delivery and online streaming booming.  The cautionary note now is when will the recovery come, the difference between the best and worst case scenarios being a gigantic chasm between May and October.  Volume continues to decline, today at 10.3 billion, but now attributed more to fence-sitting than to a relaxation of anxiety. 

Wall Street tumbles as oil crash stirs pandemic fears

Day #2 of the oil debacle has sent the Dow down another 631 points and putting the market in worsening fears of a deep economic downturn as oil traders have run out of places to keep their deliveries and are therefore paying buyers to take it away.  The focus now is even more intense on Q1 which is expected to be bad.  But as long as it’s not as bad as expected (which has been the trend for some time now), the market will still improve.  Let’s see what happens on that score.  As today’s expert said – will this prove to be a consolidation or is it instead the beginning of a bigger pullback?  The S&P has now recovered about half of the losses from the March low, but it was up nearly 2/3 a couple days ago so there’s been some backtracking.  An important business activity survey is due out Thursday and is expected to be recession-era low.  Netflix is about the only company that is doing well as everyone streams video as they shelter in place.  Volume remains consistent at about 12 billion. 

Wall Street drops as oil traders cannot give away U.S. crude

It was a bit of poetic justice today to see the price of crude tumble into negative digits for the first time in history.  The oil producers have been so greedy, deliberately increasing production into an already glutted market in order to trigger a price war to hopefully corner the market, a price war that has been a major contributor to the recent economic chaos.  But they did not foresee COVID-19.  So now they are literally paying the price, literally have to pay their buyers to take the excess crude off their hands.  Maybe now they’ll get the message that they need to turn off the taps.  It sent the Dow down nearly 600 points.  But the S&P has still now recovered nearly 2/3 of its losses from the March low and remains just 17% below the February record high.  Volume seems to be steadying out at around 12 billion which points to a little bit more stability.  But it’s still way above normal where it will likely remain until until there is a vaccine and/or treatment.  Let’s see how long the oil producers are forced to give their product away.  

Succinct Summations for the Week 4.17.20 (plus special AAII virtual event 4/21)

The usual weekly summation is below.  The positive this week was a big one -- not only was there a respectable rally for second week in a row but also promising progress on potential vaccines and treatments.  The big negative is the same as before -- the lack of a proper U.S. response to the health crisis compared to other nations, and per Mr. Ritholtz, a deficiency that likely raised the death toll far above what it might have been otherwise.

23 RULES FOR TRADING

For your weekend reading, I submit this article I found on the Investing Breakout website this morning, a list of 23 one-line pearls of wisdom for how to find success as a trader. 

Wall Street gains on Boeing surge and coronavirus drug hopes

There’s nothing like ending a week on a high note but with today’s news of giant Boeing making plans to restart production in Washington state and with Gilead Sciences issuing a good report on their new drug to treat COVID-19, the Dow surged over 700 points.  The news sent waves of hope through the market at the prospect that it might not have to wait for a vaccine for this crisis to end; there might actually be a treatment on the horizon.  The S&P has now recovered 2/3 of the losses since the March low as reopening guidelines provide some hope and optimism.  Volume came in at just over 12.7 billion, a modest but first uptick in a while, but it’s on optimism instead of panic. 

Wall Street rises as Amazon and Netflix hit record highs

It was a rocky ride today with the Dow swinging back and forth in a minus 300 point range but finally closing up a modest 33 points.  What is significant about this 33 points is that is was triggered by new record highs from both Amazon and Netflix, meaning that the FAANG stocks may prove to be our saviors yet.  The S&P Q1 forecast is now for a 12.8% slump with today’s expert saying, “We’re not going to see a V-shaped recovery,” though I think it’s far too early to be predicting what shape the recovery may take so it could be V-shaped as soon as these lockdowns are done.  The banks are in for a beating expecting a wave of loan defaults with so many out of work and so many businesses struggling to survive.  We are now at a stunning 20 million unemployed.   But volume continues to ebb, today at its lowest yet since the beginning of the panic, meaning the panic continues to subside with a relatively modest 11.6 billion shares traded. 

Wall Street falls on dour economic data, corporate earnings

The market was expecting dismal economic news and it got it which sent the Dow down 445 points with the major banks all reporting a slump in Q1 profits.  There was the further bad news of retail sales dropping nearly 9% in March and manufacturing dropping to a 74 year low.  (Why aren’t all these factories making face masks, respirators and testing kits?)  The Q1 forecast is now for a 12.8% drop in earnings.  And the VIX is up again after dropping yesterday to its lowest level in five weeks.  Volume continues to ebb, this time coming in just under 11 billion. 

Wall Street jumps as hopes for easing lockdown offset earnings worry

Despite jitters of what is widely expected to be a very shocking Q1, the Dow got a lift of nearly 560 points due to the hopes that the U.S. economy may be reopening sooner than previously expected and that the health crisis may be ebbing  Trump has said there will be announcements about the reopening in another day or two though there is a concern about a conflict with the nation’s governors who have stated that they, not Trump, have the ultimate authority to end the lockdowns and may indeed defy him if he orders the lockdowns lifted too soon.  

Dow, S&P 500 slide as focus shifts to earnings; Nasdaq gains

On lighter volume due to Easter Week, the Dow took a 328 point dive today as the markets brace for the kickoff to what is expected to be a rough Q1.  On the plus side, New York’s Cuomo said he believes that the worst is over and there is a definite trend in declining daily hospital admissions during the past week or so.  NYC, which is seeing the bulk of the nation’s infections and deaths, does seem to be plateauing and investors are encouraged by this as well as Cuomo’s intention to soon announce a coordinated plan for reopening businesses.  Volume was just under 11 billion, which at any other time would be considered outrageously high, but compared to the panic of recent weeks is definitely tame and expected to become tamer as the market panic continues to subside. 

Succinct Summations of Week’s Events, 4.10.11 (plus a treasure trove of COVID-19 help)

It's been quite a week and the summation is below.  The main positive is that the markets rallied and recovered half of the losses from the recent collapse.  The main negative is that COVID-19 continues to climb, even though in recent days it appears to perhaps be reaching a plateau.  We were supposed to have reached peak by now; we are close.  Perhaps we'll see it sometime this coming week.  The bonus this Easter Sunday is a treasure trove of information posted on The Big Picture blog this morning by Barry Ritholtz. It contains links to websites covering everything about this crisis including Medical, Financial Aid, Staying Safe, Entertainment, and the prospects for the economic Recovery.  It's a mini-encyclopedia on the pandemic, well worth a study.  Happy Easter everyone!

Stats, Finance, and COVID-19

Below is a rather fascinating animation (do use the reset button to see it) showing how in the past few days COVID-19 has become the #1 daily cause of death in the U.S.  We might also note from the news that, as of today, the U.S. has more infections and more deaths from COVID-19 than any other country in the world. But we from the world of finance and investments are all trained in the science of stats and know that numbers can be deceiving.  And I believe in this case they are.

Timeline of History’s Deadliest Pandemics

This was a very bad Good Friday in terms of the day's toll in increasing U.S. deaths and infections from COVID-19.  And though this day on the liturgical calendar is the one day persons of faith set aside to contemplate suffering, I appreciated the day's contribution by Barry Ritholtz and his two cents on putting this whole thing in perspective by comparing this crisis to every major pandemic the world has known since ancient Rome.  If the estimate proves accurate, this timeline demonstrates that our predicament will likely be more benign than most of the others.  Perhaps we can use this knowledge to insert more joy into the Easter weekend. 

Wall Street rises on latest Fed rescue program

Once again the Dow was up, way up, over 500 points much of the day only to come crashing down again in the final hour to close 285 points up.  The 500 point trigger was again the apparent peaking of the coronavirus along with the Fed committing to provide much needed help to businesses up to 10,000 employees.  That shot the financial index way up which moderated the sting from the continuing very bad news from the unemployment front with 6 million more filing for benefits making the total now 16 million or 10% of the workforce out of a job.  Also helping the push was news from New York of another day with the lowest number of new hospitalizations since the beginning of the crisis.  Then came the news that OPEC production cuts were considered too anemic to move the meter and oil and energy took another dive.  The better news is that volume continues to fall, today at just 11.5 billion, again implying the panic may be settling. 

Wall Street rallies on hopeful coronavirus signs, healthcare lift

With more hopeful signs of the U.S. getting close to peak, now said to be just four days away, and with Bernie Sanders’ announcement today withdrawing from the presidential race, the market was on a constant upward trajectory with the Dow topping out with a plus 779 points.  The healthcare sector got a particular boost as well as oil with crude up 6% on hopes of an OPEC cut.  The S&P is now down just 19% from its high which puts it more than halfway to a complete recovery from the March low.  The big question that remains:  what will be the mechanism for restarting the economy?  It’s likely no one has an answer for that one yet.  Volume continues to drop, today at 11.5 billion, meaning the panic selling may be winding down. 

Oil drop saps gains as Wall Street fades late

The Dow was up nearly a thousand points throughout much of the day all on continuing news that the virus outbreak in the nation’s biggest hot spots may be leveling. The news from New York was especially encouraging suggesting that hospitalizations may be plateauing,  But then came the news that the agreement with the Saudis to cut production may not be coming so quickly and the energy markets plummeted and the Dow went into a tailspin losing all its gains and closing near even.  The Q1 forecast is now for a minus 6.4% instead of the plus 6.3% from January 1^st.  The S&P is up 18% from the March low and down 21% from the February high, but that’s still close to a 50% recovery in a few weeks and that’s not bad.  The VIX is also down from recent 12-year peaks as it has been for the past several sessions indicating the panic is gradually subsiding.  Volume continues below recent averages at just under 14 billion. 

Wall Street soars on hopes of slowing coronavirus deaths

This has been dubbed “Pearl Harbor Week,” the week that infections and deaths are supposed to spiral dramatically (and hopefully peak) and though that is probably the bleak scenario that is coming in the next few days, the fact is that for today at least, deaths in New York on Sunday have fallen from Saturday for the first time in a week.  Deaths in the U.S. overall have suddenly declined today to an 11% increase over yesterday compared to an average of an 18% increase every day last week.  And in Italy, France and Spain, it appears in the last few days that they too are seeing a peak with a significant drop in deaths over the weekend.  

Succinct Summations of Week’s Events 3.3.20 (plus the Bell Disaster Index)

Again below is presented the weekly summation, the main positive that 90% of the country is now sheltering in place which should help flatten the curve, the main negative being the biggest drop in payrolls since 2009.  This all goes along with the increase of jobless claims and unemployment.  In fact all of these negatives are the direct result of the pandemic.  And depending on one's point of view, the biggest negative, at least as listed here by Barry Ritholtz, is the inept handling of the crisis at the federal level.

AAII Editor's Note

For your weekend reading, here is a quick two minute read from Charles Rotlblut, AAII Journal Editor.  Though the screed is about two weeks old, it still does an excellent job of summarizing the crisis and some pretty cogent analysis of where we are heading, both in regards to the pandemic and the market/economy.  It's well worth a few minutes of your time.  Stay safe this weekend. 

Wall Street falls as coronavirus shreds U.S. payrolls

It was another day of intensifying fears of what many expect to be the deepest recession in history as Labor Dept data showed a loss of 701,000 jobs in March. What was particularly debilitating about this number was that it only showed job losses through mid-March and everyone knows mass layoffs that are not accounted for happened in the latter part of the month.  The S&P closed down 27% below its February record and JP Morgan has now forecast a whopping 38% contraction in GDP for Q2.  The one bright spot: the VIX closed at 46.8, its lowest in a month, which may indicate the panic is slowing. Volume was also a bit lower at just under 11.6 billion. 

Oil jump lifts Wall Street as jobless claims data surges

Everyone knew that today’s report on new applications for unemployment benefits would be bad, forecasted to be as many as 5.2M, and then turned out even worse at an astounding 6.6M.  But those concerns quickly faded with the much more positive news of a truce in the oil price war between Russia and the Saudis with Saudi Arabia calling for an emergency meeting to cut output.  This sent crude futures up nearly 25% and the Dow up nearly 470 as the oil crisis has been seen as one of the dominant factors throwing us into recession.  Volume today came in at just over 12.6 billion. 

Wall Street dives 4% as virus pandemic fears intensify

With the new dire warnings of the “best case scenario” death toll in the U.S. being 250K+, the Dow plunged nearly a thousand points again making investors bail from even safe haven defensive equities like consumer staples, real estate and utilities.  New factory orders falling to an 11-year low and payrolls down 27,000 didn’t help either.  Investors are realizing the virus is here for a while longer and that the bear market is going to be here longer.  (Strange, it seems the rest of us already knew that!) Nerves are also stretched over Q1 reporting which begins in two weeks.  Today’s earnings forecast is for a reduction of 4.3% Q1, 10.9% Q2.  Volume is 12.3 billion which either indicates the panic selling is slowing a bit or that investors are on the fence waiting for more jobless and payroll reports.  They’re expected to be bad.  If they’re not as bad as expected, there should be a little boost.