Information Tech, Energy, Existing Home Sales Led Tuesday’s Markets South

The U.S. markets were led lower for the second day in a row on Tuesday with the decline in the information technology & the energy sectors which dropped by -4.1% & -1.7% respectively. Simultaneously we received the report that March’s existing-home sales fell by -8.5% m/m missing estimates. We also digested the confusing, scary and a bit surprising news that Georgia, South Carolina, Texas, and Tennessee would be ‘reopening” which will allow for some businesses that require close proximity to open their doors, including gyms, nail/hair salons, bowling alleys, tattoo parlors, dine-in restaurants, theaters & other entertainment venues as early as Friday or Monday. Note that the number of worldwide coronavirus cases has grown to more than 2.5 million while the number of worldwide deaths has jumped to the north of 175,000 and the US now has 819,866 confirmed cases with 44,768 deaths and still no reliable treatment or vaccine not to mention the widespread confusion surrounding how one catches or spreads the virus. How will this work…? If you know, then please enlighten me. 

Overall the markets again were down. The S&P 500 closed down by -3.07%. The Dow declined by -2.67% as three components released their earnings including Coca-Cola (KO) which closed at $45.31/share down -2.6%, IBM which dropped by -3% closing at $116.76/share after a disappointing earnings release & The Travelers Group (TRV) which closed at $101.78./share & flat on the day. The Nasdaq lost -3.48% with the popular FAANG stocks closing down across the board as follows: Facebook (FB) closed at $170.80/share, down by -4.17%, Amazon (AMZN) closed at $2,328.12/share, down by -2.74%, Netflix (NFLX) dropped by -.84% closing $433.83/share,  Apple (AAPL) closed at $268.37/share declining by -3.09%, & Alphabet (GOOG) closed at $1,216.34/share down by -3.97%. The Russell 2000 slid by -2.33%. With the selloff in the markets, there was a subsequent flight to safety and US treasuries were bid up while yields declined. The 2-yr US treasury yield fell by 1 basis point to .20% & the 10-yr yield fell by 6 basis points to end at .57%. The U.S. Dollar Index strengthened by +.2% to end at 100.17. 

Oil continued to face downward pressure even as OPEC was reported to be discussing the implementation of cuts immediately rather than waiting until May 1 and President Trump’s assurances that the White House would support the energy industry in the US. Brent futures were reported to be going for approximately $19 a barrel at the close, an 18 year low. Chevron (CVX) closed at $81.64/share down -2.31% and Exxon (XOM) closed at $40.96/share down -.53% & Occidental Petroleum Corporation (OXY) closed at $12.34/share down -1.99%. 

Gold prices ended at lower at $1,694/oz while silver prices pulled back today closing at $14.8/oz. North American silver and gold producer Hecla Mining Company (HL) fell -2.58% to end the day at $2.27/share.

LATE IN THE DAY

It was also reported later in the day that a $484B coronavirus aid package was passed through the Senate today after Congress & the White House reached a deal to add a small business payroll fund & supply money for hospitals & COVID-19 testing. This measure must now be voted on by the House supposedly on Thursday. Hopefully, this financial aid will be passed and will go to help to move the economy along and hopefully provide a springboard to ignite a recovery once we get this coronavirus situation figured out.

Laboratory Corporation of America Holdings (LH) (“LabCorp”) announced that it has received an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA). The EUA permits nasal swab specimens to be collected at home using the Pixel by LabCorp™ COVID-19 test home collection kit if recommended by a healthcare provider after completing a COVID-19 questionnaire. LabCorp’s COVID-19 at-home test kit is part of the company’s continued commitment to increase the supply and availability of tests for healthcare workers and first responders who have symptoms consistent with COVID-19. Enabling individuals to self-administer sample collection will help prevent the risk of transmitting the virus to others and reduces the demand for personal protective equipment (PPE) as the tests do not require a clinician to perform the test collection. Shares of LH closed today’s trading at $148.18/share up by +1.76%.

We are now suspending immigration into the US for the next 60 days.

MOVERS TODAY

Shares of Beyond Meat, Inc. (BYND), a leader in plant-based meat, closed at $84.96/share up +7.38% today.  BYND announced today that it is offering its meat products in China for the first time after coming to an agreement with Starbucks (SBUX). BYND will report its results for the first quarter ended March 28, 2020, on Tuesday, May 5, 2020, after market close.

TOMORROW

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

• The weekly MBA Mortgage Applications Index
• The FHFA Housing Market Index for April

Economic Reports

• On Monday, we did receive any significant economic reports.
• On Tuesday, we received the existing home sales report which confirmed a drop by -8.5% month/month in March while total sales increased by +.8% year-over-year.

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 MBA Mortgage Applications Index
• The FHFA Housing Market Index for April