“New Fiscal Stimulus Concepts & Deep Value Plays Lift Markets” Vista Partners Daily Market Recap – March 10, 2020

Tuesday brought forth a very positive swing in the markets after yesterday’s abrupt and harsh trading session where we saw a number of interesting values created as stocks were sold indiscriminately.  Today’s positive swing in was proceeded by a positive overnight move in the Asian markets as China and South Korea feeling like they are making some progress against the coronavirus and possibly getting back to work and the Italian government pledging to add support to their economic system in reaction to the coronavirus situation. These beliefs and moves abroad were weaved in with President Trump’s move to float the concept of cutting payroll taxes for hourly workers and/or a 0% tax rate for the balance of the year while adding support for the protection of companies in the airlines, cruise ships, & shipping industries. Many of the travel-related stocks that took a massive hit recently recovered nicely today i.e. Royal Caribbean (RCL) closed at $51.67/share up +7.04%, Carnival (CCL) closed at $24.02/share up +10.49%, Norwegian Cruise Line Holdings (NCLH) closed at $20.50/share up +3.48%, Alaska Air (ALK) closed at $46.78/share up +8.31% & American Airlines (AAL) closed at $17/share jumping +15.25%. 

Oil prices also recovered is it jumped by +10.2% and closed at $34.25/bbl after yesterday’s Saudi Arabia vs. Russia fight that saw prices fall precipitously. As a result the S&P 500 energy sector also rebounded +4.7%. A number of energy-related stocks saw out weighted rebound gains today after being crushed yesterday i.e. Continental Resources, Inc. (CLR) jumped +33.13%, Western Midstream Partners, LP (WES) jumped +38.80%, Marathon Oil Corporation (MRO) jumped +21.21% and Chevron (CVX) added +5.34%.

Treasury yields also recovered a bit too especially towards the end of the day as the 2-yr yield closed 15 basis points higher at .47% while the 10-yr yield closed 25 basis points higher at .75%. The U.S. Dollar Index also strengthened by +1.6% to close a 96.45.

All indices were up. The S&P 500 moved up by +4.94%, the Dow moved up by +4.89%, the Nasdaq moved up by +4.95% & the Russell gained +2.85%. The FAANG stocks recovered too. Facebook (FB) closed at $178.19/share, +5.13%, Alphabet (GOOG) closed at $1,280.39/share, -+5.33%, Amazon (AMZN) closed at $1,891.82/share, +5.07%, Apple (AAPL) closed at $285.34/share up 7.2%  & Netflix (NFLX) closed at $364.13/share, +5.09%. 

With the positive trading session, the Velocity Shares Daily 2x VIX Short-Term ETN (TVIX), a leveraged “bet” against the market rising, closed at $216.86/share & was off -14.75% after reaching $302 yesterday.

Gold moved lower today and closed at $1,650/oz and silver prices also moved lower and closed at $17.01/oz.

Are we out of the woods as for as the market goes for now? I would suggest that we are not even close as we are still dealing with the fallout or development of the coronavirus situation staring us in the face and a number of industries pulling back spending and/or halting meetings and banking seems to have ground to a halt for the most part. In fact, I believe that we are in for a relatively high amount of volatility and it would best keep the powder dry on a regular basis for the time being so one is in a position to strike when opportunities arise. 

Economic Reports

On Monday, we did not receive any economic data. 

On Tuesday, we received the NFIB Small Business Optimism Index for February, which confirmed a higher move to 104.5.

Investing & Inspiration

“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:

• Consumer Price Index for February
• The Treasury Budget for February
• The weekly MBA Mortgage Applications Index