“Markets, Yields, Apple Rebound As Coronavirus Fears Are Tamed” – Vista Partners Daily Market Recap For January 28, 2020

News of China’s increased enforcement of travel restrictions and improved control of the coronavirus situation seemed to calm things down a bit today as fears were tamed.  This was paired with a “controlled” coronavirus situation in the U.S. that was also being reported as we remain at 5 reported cases. The last reported coronavirus worldwide numbers = that I have seen have us at 131 deaths and nearly 5,500 confirmed cases. However, with this overall perceived and somewhat improved outlook and the yields of U.S. treasuries rebounding along with a slightly wider yield curve, we experienced a subsequent and healthy rebound of the broad markets. In addition, the information technology sector that led the markets down yesterday spearheaded the markets move upwards today ending up +1.9%. The heavily weighted FAANG stocks joined the party across the board.  Facebook (FB) closed at $217.79/share, +1.36%, Amazon (AMZN) closed at $1853.25/share, +1.36%, Apple (AAPL) closed at $317.69/share, +2.83% after reports flew about that they had requested that suppliers increase iPhone production by a rate greater than 10% over last year,  Netflix (NFLX) closed at $348.52/share, +1.64% & Alphabet (GOOG) closed at $1452.56/share, +1.30%.

The Nasdaq Composite ended at 9,269.68, +1.43%. The S&P 500 ended at 3,276.24, +1.01% as ll 11 sectors moved into positive territory. The Dow Jones Industrial Average ended at 28,722.85, +.66%. The Russell 2000 moved lower by -.24% ending at 1,658.31 as was the lone holdout.

Three Dow 30 components reported today including 3M (MMM) closing at $165.56 off -5.7% and Pfizer (PFE) closing at $38.14/share, -5.0% after both missed Wall Street’s estimates and then United Technologies (UTX) which closed at $152.86, up +1.2% after exceeding Wall Street’s estimates. A notable move also came from Intel (INTC) which closed at $67.31/share up +2.47% today.

The “fear gauge” Vix (TVIX) ended at $48/share pulling back -10.95% with the improved daily outlook and traded in a range of $47.36 – $52.15.

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.

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:

• FOMC Rate Decision,
• Pending Home Sales for December,
• The weekly MBA Mortgage Applications Index, &
• The Advance reports for Wholesale Inventories, Retail Inventories, & Trade in Goods.