Fed’s Remarks, US-China Tensions, COVID-19 Testing/Reopening Uncertainty Weigh On Market Today

We now have seen more than 4,308,055 confirmed cases of COVID-19 in the world with 1.518M cases that have recovered and more than 294k worldwide deaths. In the US, we have 1.411M confirmed cases with 240k that have recovered with 83,953 deaths while our economy is still shut down for the most part as stimulus measures are pushed forward and more is contemplated while some parts of the US are attempting to reopen.

Today, we heard Fed Chair Jerome Powell’s less than rosy remarks. He essentially warned us about lasting economic damage while reminding us that approx. 40% of the households earning less than $40k/year lost their jobs in March. He also let it be known that more stimulus will likely be needed to counter the current coronavirus-induced contraction, but then he stopped short of endorsing negative interest rates in order to do so.

Adding to the Fed’s somewhat dire message, the markets had to digest increased stories relating to the increased tensions surrounding the US-China trade war as it ramps up again, more stories of false readings on COVID-19 testing & the continuing efforts related to the uncoordinated nationwide reopening measures in the US that are being conducted by 50 different governors and countless ill-prepared and advised mayors. 

In turn, markets experienced a down day with the mix of negative news stories casting doubt on economic development. The S&P 500 also closed down -1.75%, the Dow lost -2.17%,the Nasdaq closed down -1.55% & the Russell 2000 dropped -3.32%. The real estate sector down -4.3%, the industrials down -2.8%, & the financials sector down -2.7% led the decline which included a red day for all eleven sectors.

The popular FAANG stocks closed as follows: Facebook (FB) closed at $2105.10/share, down by 2.38%, Amazon (AMZN) closed at $2,367.92/share, up .47%,  Apple (AAPL) closed at $307.65/share down by -1.21%, & Netflix (NFLX) rose 1.49% closing at $438.27/share, & Alphabet (GOOG) closed at $1,349.33/share down 1.92%.

On the macroeconomic front we received the following reports: 

• The Producer Price Index for final demand report showed a decrease of 1.3% month/month in April.
• The weekly MBA Mortgage Applications Index report confirmed a rise of .3%

Oil prices dropped to close at $25.34/bbl down 1.6%. Chevron (CVX) closed at $88.70/share down -2.63%, Exxon (XOM) closed at $41.93/share down by 4.96% & Occidental Petroleum Corporation (OXY) closed at $13.44/share down 7.82%. 

The 2-yr US treasury yield moved down 1 basis point to end at .15% & the 10-yr yield moved down by 3 basis points to end at .65%. The U.S. Dollar Index strengthened by -.3% to end at 100.25. 

Gold prices ended lower today at $1,723/oz (+14) while silver prices closed at $15.74/oz (+.10). North American silver and gold producer Hecla Mining Company (HL) ended the day at $2.57/share up 1.58%.

MOVERS

The following stocks moved significantly today:

• Shares of Progyny, Inc. (PGNY) shot up to $27.49/share today prior to closing at $36.13/share up +27.53%. Progyny, a leading benefits management company specializing in fertility and family building benefits solutions in the United States, announced its financial results for the 3-month period ended March 31, 2020, as compared to the three-month period ended March 31, 2019. PGNY confirmed that they are “well-positioned” to successfully manage COVID-related impacts as they realized a 72% increase in Q1 revenue of $81M, $12.1M in operating cash flow, while they added to PGNY’s “already strong balance sheet.” Learn more. 
• Shares of Genus Brands International, Inc. (GNUS) shot up 79.85% closing at $1.31/share today. Genus is a global brand management company that creates & licenses multimedia entertainment content for children announced the closing of a $2.8M registered direct offering in concert with the recent launching of KARTOON CHANNEL!.

TOMORROW

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

• The weekly Initial and Continuing Claims report
• The Export and Import Prices for April

Economic Reports

• On Monday, we did not receive any significant economic data.
• On Tuesday, we received the following reports:  the Consumer Price Index report showed a decrease of -.8% month/month in April, while core CPI decreased -.4%, the Treasury Budget report for April confirmed a deficit of $737.85B vs. a surplus of $160.3B during the same period a year ago., & the NFIB Small Business Optimism Index report for April decreased to 90.9.
• On Wednesday, we received the Producer Price Index for final demand report showed a decrease of 1.3% month/month in April & the weekly MBA Mortgage Applications Index report which confirmed a rise of .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 Employment Situation Report for April
• The Wholesale Inventories for March