“April Fools Day Brings More Meandering Market Pain” – Vista’s Daily – April 1, 2020

The first day of April, “April Fools Day” as we call it, was no laughing matter as it brought forth another market selloff. This selling continued to flow along in concert with the growth of the number of worldwide coronavirus cases which now total +900,000 including +45,000 deaths. The US is now projecting our number of deaths to be between 100,000 & 240,000 before all is said and done over the next weeks. This revelation that hit us yesterday after the close, a very sharp trajectory up from +4000 deaths that have occurred to date, to say the least, is causing even the strongest of us to question our respective fortitude.

The market results at the end of the day were again ugly across the board and seemed to ski downhill in a meandering manner throughout. The S&P 500 closed down -4.41%, with the real estate & utilities sectors leading the 11 sectors dropping -6.1% each.  The Dow dropped -4.44%, the Nasdaq lost -4.41% & the Russell 2000 dropped a whopping -7.03%.

The FAANG stocks’ results were down as well. Facebook (FB) closed at $159.60/share, losing -4.32%, Amazon (AMZN) closed at $1,907.70/share, down by -2.16%, Apple (AAPL) closed at $240.91/share losing -5.26%, Netflix (NFLX) subtracted -3.04% closing $364.08/share, & Alphabet (GOOG) closed at $1,105.62/share, -4.92%.

The 2-yr yield rose by 2 basis points to .22% & the 10-yr yield moved lower by 6 basis points to .64%. The U.S. Dollar Index strengthened +.5% to 99.50. Chevron (CVX) closed at $68.56/share down -5.38% & Exxon (XOM) closed at $37.53/share down 1.16%. 

Gold prices closed at 1,596.60/oz, silver prices dropped to $13.99/oz, & oil prices moved higher to close at $11/bbl up $.48/bbl. Amazing to see oil prices at this level. Last year’s average closing oil price was $57.05/bbl and in 2018 it was $64.90. I would suggest that there are some great buys in this sector once all shakes loose again.

On Wednesday, we received a couple of economic reports. The ISM Manufacturing Index Report for March clocked in a reading of 49.1% slightly below the Mendoza line for expansion. The Total construction spending report confirmed a drop by -1.3% month/month in February while the Residential spending report confirmed a decrease by -.6% month/month & nonresidential spending dropped by -1.6% month/month. The ADP Employment Change report confirmed a net loss of 27k nonfarm payrolls in March. The weekly MBA Mortgage Applications Index isurged+15.3%.

Shares of Seattle-based biotech firm Atossa Therapeutics (ATOS) pulled back -7.52% today, but some compelling and good news is on the way for us. Atossa’s CEO Steven Quay, MD, Ph.D. Fox News interview is reportedly due to be aired at 8:30 am pacific tomorrow, Thursday. He will be speaking about his recent announcement regarding a new combination treatment with the potential to improve pulmonary function and reduce or eliminate mechanical ventilation in patients with the coronavirus infection. The treatment uses two drugs previously approved by the FDA for other conditions: nebulized (inhaled as a fine mist) heparin combined with N-acetylcysteine (NAC), termed “H-NAC.” Dr. Quay is making this new clinical trial protocol (called the COVID-19 HOPE Trial) available for use by the worldwide medical community. Starting today, doctors around the world are invited to directly download the protocol free of charge at www.DrQuay.com. Steven Quay, M.D., Ph.D. stated, “Given the rapid growth in the number of new COVID-19 cases worldwide, and especially in the U.S., I made the decision to make the HOPE Trial documents immediately available. From my experience having invented seven FDA-approved pharmaceuticals over my career, it is my reasoned opinion that this has a high likelihood of success and should be quick to test given that these drugs are widely available. Nebulized H-NAC could become a valuable new tool for frontline COVID-19 treatment, as it should reduce or eliminate the need for a mechanical ventilator.” READ COMPLETE STORY.

Please keep up your hope, practice social distancing, and continue to stay informed and stay competitive with Vista Partners daily and otherwise and we will get through this. 

Economic Reports

On Monday, we received the Pending Home Sales report surfaced and it confirmed a rise by +2.4% in February.

On Tuesday, we received the Conference Board’s Consumer Confidence Index Report for March which confirmed a decrease to 120, while the Chicago PMI decreased to 47.8 in March & the S&P Case-Shiller Home Price Index Report for January confirmed a rise by +3.1%.

On Wednesday, we received the ISM Manufacturing Index Report for March which clocked in a reading of 49.1% slightly below the Mendoza line for expansion. The Total construction spending report confirmed a drop by -1.3% month/month in February while the Residential spending report confirmed a decrease by -.6% month/month & nonresidential spending dropped by -1.6% month/month. The ADP Employment Change report confirmed a net loss of 27k nonfarm payrolls in March. The weekly MBA Mortgage Applications Index isurged+15.3%.

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 Initial Claims and Continuing Claims report
• The Trade Balance report for February
• The Factory Orders report for February