“A Tale of Two Tapes Again Today” – Vista Partners Daily Market Recap For January 30, 2020

It was a tale of two tapes again today as we moved down significantly in the early going as fears of coronavirus developments permeated the world wide web and then the markets and moods reversed later when The World Health Organization declared coronavirus a public health emergency of international concern but stopped short of recommending any restrictions on international flights.

In support of the positive move overall today, electric vehicle giant Tesla (TSLA) shot up to close at $640.81/share,+10.3% today after beating Wall Street expectations and squeezing the shorts. Two Dow 30 components did their part as Microsoft (MSFT) closed $172.78/share, +2.8% & shares of Coca-Cola (KO) closed at $58.86/share, up +3.25% today after beating Wall Street’s expectations as new products case volume gained 3% and are boosting revenue. Mondelez International (MDLZ ) closed at $58.80/share, +7.8% after beating Q4 expectations.

The Nasdaq Composite ended at 9,298.94, +.26%. The S&P 500 ended at 3,283.66, +.31%. The Dow Jones Industrial Average ended at 28,859.44, +.43%. The Russell 2000 moved lower by -.06% ending at 1,648.22.

The FAANG stocks finished mixed today. Facebook (FB) closed at $209.53/share, -6.14% tumbling post missing Q4 Wall Street expectations primarily attributed a miss in growth in their advertising business. Amazon (AMZN) closed at $1870.68/share, +.68% but has jumped +11.03% in the aftermarkets after beating Wall Street expectations post the close today.  Apple (AAPL) closed at $323.87/share, -.14% after beating Wall Streets’ earnings expectations this week. Netflix (NFLX) closed at $347.74/share, +1.33% & Alphabet (GOOG) closed at $1455.84/share, -.19%.

The “fear gauge” Vix (TVIX) ended at $46.70/share pulling back -2.57% and traded in a wider range of $46.45 – $53.75.

Economic Reports

On Monday we received the New home sales report which confirmed a drop by -.4% month/month in December to a seasonally adjusted annual rate of 694k units.

On Tuesday, we received the Conference Board’s Consumer Confidence Index report which increased to 131.6 in January.
Total durable goods orders report increased +2.4% month/month in December. When excluding transportation, durable goods orders dropped -.1%. The S&P Case-Shiller Home Price Index moved up +2.6% year/year in November.

On Wednesday, we received the Pending Home Sales report which dropped -4.9% in December. The Advance report for International Trade in Goods for December confirmed a deficit of $68.3B vs. $63.2B in November. The Advance report for Retail Inventories for December was flat while the Advance report for Wholesale Inventories for December dropped -.1%. The weekly MBA Mortgage Applications Index Report jumped +7.2%.

On Thursday, the Real GDP report showed a move higher at a seasonally adjusted annual rate of +2.1% in Q4. The GDP Price Deflator was up +1.4%. For the week ending January 25, initial claims dropped by 7k to 216k while continuing claims for the week ending January 18 dropped by 44k to 1.703M.

Investing & Inspiration

“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:

• Personal Income and Spending for December,
• The Chicago PMI for January, the Employment Cost Index for the fourth quarter, &
• The final University of Michigan Index of Consumer Sentiment for January