“$2 Trillion or Not?…Was The Question” – Vista’s Daily – March 25, 2020

The markets got excited again over the possibility of a $2 trillion stimulus package coming to the economic rescue after it was blessed by the Senate last night and they moved up as much as 5% in early trading, however, doubt and worry over potential delays from the house showed up and the markets retreated into the close.  At the close of trading, the S&P 500 closed up +1.15% as 8 of the eleven sectors moved higher with energy & industrials leading the way. Oil prices moved up +2.5% to $24.53/bbl and global growth prospects again were believed to be a bit less certain with the promise that the US is targeting April 12th/Easter to begin getting back to work. The Dow also added +2.39% as Boeing (BA) surged +24.32% on stimulus-related bailout terms, Nike (NKE) regained its wings after exceeding analyst expectations and jumped +9.24% (digital sales in Greater China increased more than 30% while brick and mortar retail sales were impacted by temporary store closures related to COVID-19) & Chevron (CVX) added another +4.09%. The Nasdaq lost -.45% & the Russell 2000 gained +1.26%. 

The FAANG stocks closed down across the board as Facebook (FB) closed at $156.21/share, dropping -2.96% after recoginizing that its ad business is suffering, Amazon (AMZN) closed at $1,885.84/share, down by -2.8%, Apple (AAPL) closed at $245.52/share dropping -.55%, Netflix (NFLX) cooled off again dropping -4.18% closing $342.39/share, & Alphabet (GOOG) closed at $1,102.49/share, -2.82%.

U.S. Treasury yields moved in opposite directions today. The 2-yr yield dropped by 7 basis points to .30% & the 10-yr yield moved higher by 4 basis points to .86%. The U.S. Dollar Index weakened -1.2% to 100.86, gold prices dropped to $1,642/oz, and silver prices rose to $14.69/oz.

The February durable goods orders report showed and rise of +1.2% and when you exclude transportation, durable goods orders dropped by -.6%. The FHFA Housing Price Index report showed a rise by +.3% in March while the weekly MBA Mortgage Applications Index decreased by -29.4%.

Three bright spots in our portfolio today came from the healthcare sector. Breast cancer-focused biotech Atossa Therapeutics (ATOS) rose +9.6% as they wait to meet with the U.S. FDA on April 30, 2020. The objective of this meeting is to discuss the clinical development of oral Endoxifen to reduce mammographic breast density (MBD). Developers of INVOcell, a patented and FDA cleared medical device used in the treatment of infertility that enables egg fertilization and early embryo development to take place in the woman’s body, INVO Bioscience (INVO), rose +6.96%. Neubase Therapeutics (NBSE), a biotechnology company developing next-generation antisense therapies using its scalable PATrOL™ platform to address genetic diseases, rose +11.9% today.

Economic Reports

On Monday, nothing of significance was reported.

On Tuesday, we received the New Home Sales Report for February that confirmed that it dropped -4.4% month/month in February to a seasonally adjusted annual rate of 765k units.

On Wednesday, we received the February durable goods orders report which showed a rise of +1.2% and when you exclude transportation, durable goods orders dropped by -.6%. The FHFA Housing Price Index report showed a rise by +.3% in March while the weekly MBA Mortgage Applications Index decreased by -29.4%.

Investing & Inspiration

“I believe the returns on investment in the poor are just as exciting as successes achieved in the business arena, and they are even more meaningful!” -Bill Gates

“Every portfolio benefits from bonds; they provide a cushion when the stock market hits a rough patch. But avoiding stocks completely could mean your investment won’t grow any faster than the rate of inflation.” – Suze Orman

“The tax on capital gains directly affects investment decisions, the mobility, and flow of risk capital… the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.” – John F. Kennedy

“If all the economists were laid end to end, they’d never reach a conclusion.
-George Bernard Shaw

“The riskiest thing we can do is just maintain the status quo.
I get up at 4:30 in the morning, seven days a week, no matter where I am in the world. I think it is important for people who are given leadership roles to assume that role immediately. What I’ve really learned over time is that optimism is a very, very important part of leadership.” Bob Iger, Ceo of Disney

“There are old traders and there are bold traders, but there are very few old, bold traders.”-Ed Seykota

“Let this scenario play out on its own, in its own fashion. As you watch it unfold, you will soon be grateful that you choose the peaceful path. Remember — those who live by the sword, die by the sword.”

“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” -Jim Cramer

“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.” -Mark Cuban

“Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” -Bruce Kovner

“The policy of being too cautious is the greatest risk of all.” -Jawaharlal Nehru

“The only true test of whether a stock is “cheap” or “high” is not its current price in relation to some former price, no matter how accustomed we may have become to that former price, but whether the company’s fundamentals are significantly more or less favorable than the current financial-community appraisal of that stock.” -Philip Fisher

“I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.” -Richard Dennis

“The four most dangerous words in investing are: ‘this time it’s different.” -Sir John Templeton

“Money doesn’t make you happy. I now have $50 million but I was just as happy when I had $48 million.” -Arnold Schwarzenegger

Tomorrow

Tomorrow’s significant economic data report schedule will include the following:

• The weekly Initial and Continuing Claims report
• The third estimate for Q4 GDP
• The Advance reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories for February