“Markets Love Promise of Further Stimulus & Getting Back to Work Idea” – Vista’s Daily – March 24, 2020

At the close of trading today all markets moved significantly higher. The S&P 500 jumped +9.38% as all 11 sectors moved higher with energy leading the way rebounding +16.3% as oil prices moved up +1.9% to $23.93/bbl and global growth prospects seemed possible. The Dow also flew up +11.37% as Chevron (CVX) regained its exposure surging +22.74% and leading the way. The Nasdaq rose +8.12% & the Russell 2000 gained +9.39%. The broad & positive market moves can be attributed to the number of stimulus measures that have been put in place by the FED and the White House lately along with the promise of more than $2-6 trillion of additional stimulus that is believed to be on the way here in the US along. Additionally, a belief that there is a possibility of us all getting back to work by Easter came into the market’s thinking today as President Trump stated that was his hope. I hope that he is right, but I have my doubts as we have not shown any evidence that we are slowing the growth of the coronavirus epidemic here in the US. I further hope that we continue to respect and roll out social distancing, we can knock this virus out soon, but I feel that today was just another yoyo day and volatility. 

Having said that it was a great day in the markets today and the FAANG stocks joined the party across the board except for Netflix (NFLX) which cooled off after yesterday’s +8% move and dropping -.82% closing $357.32/share. Amazon (AMZN) closed at $1,940.10/share, up by +1.96%.  Apple (AAPL) closed at $246.88/share surging +10.03%, Facebook (FB) closed at $160.98/share, jumping +8.7%, & Alphabet (GOOG) closed at $1,134.46/share, +7.37%.

U.S. Treasury yields moved higher today. The 2-yr yield rose by 8 basis points to .37% & the 10-yr yield moved higher by 5 basis points to .82%. The U.S. Dollar Index weakened -.5% to 101.96, gold prices rose to $1,632.88/oz, and silver prices rose to $14.44/oz, +9.22%.

The New Home Sales Report for February confirmed that it dropped -4.4% month/month in February to a seasonally adjusted annual rate of 765k units.

After the market closed today NIKE, Inc. (NYSE: NKE) reported fiscal 2020 financial results for its third quarter ended February 29, 2020. Revenues rose 5 percent on a reported basis and 7 percent on a currency-neutral basis*; Digital sales up 36 percent versus the prior year. Diluted earnings per share were $.53, including a $0.25 non-recurring, non-cash charge associated with the transition to a strategic distributor model in South America. Inventory increased 7 percent to $5.8 billion; closeout inventory units declined versus the prior year. Revenues increased to $10.1 billion in the third quarter, up 5 percent on a reported basis and up 7 percent on a currency-neutral basis, driven by 13 percent currency-neutral growth in NIKE Direct with digital growth of 36 percent and strong growth across EMEA, APLA and North America, offset by the impact of COVID-19 on our business in Greater China. Digital sales in Greater China increased more than 30 percent while brick and mortar retail sales were impacted by temporary store closures related to COVID-19. Shares of Nike closed at $72.33, up by +15.18% and is showing that is at $80.21, +10.89% in aftermarket trading.

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.

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:

• Durable Goods Orders for February,
• The FHFA Housing Price Index for March,
• The weekly MBA Mortgage Applications Index