“New Market Records, Coronavirus Cloudy, Virgin Galactic Hits New Highs” Vista Partners Friday’s Weekly Market Wrap For Feb.14, 2020

Happy Valentine’s Day to one in all and I hope you are with your loved ones today! Interesting to note that the Greeks actually used 4 different words for love. “Eros” (passionate or intimate love), “Philia” (friendship or affectionate love among friends or family), “Sorge” (affection for family) and “Agape” (unconditional love or “true love” used in marriage, children and used in Christianity to describe God’s love for us). Although the focus of Valentine’s Day is on Eros, don’t forget to practice Philia, Sorge, and Agape with your family, friends, neighbors, strangers and even your enemies!

I also hope that all of you have a great and relaxing holiday weekend planned with President’s Day on Monday. Please note that the markets are closed on Monday but resume back on regular hours on Tuesday, February 18th.

The broad markets overall rose again this week as it surged in the early part of the week achieving new record highs, but then tailed off as reported coronavirus cases surged causing a bit of a cloudy investing market surrounding the situation and causing concerns.

US treasury prices yields flattened a bit this week and the talk of an inverted yield crept back into the conversation. The 2-yr yield moved up by 3 basis points ending at 1.42% while the 10-yr yield remained at 1.58%. The U.S. Dollar Index strengthened by +.4% to end at 99.12.

Oil prices rose a little this week ending up by +3.5% (down -14.7% YTD) closing at $52.09/bbl up from last week’s close of $50.42/bbl.

The Dow ended the week at 29,398.08, +1% week over week and is now up 3% YTD.

The S&P 500 ended the week at 3,380.16, representing a 1.6% weekly gain and now up 4.6% YTD. The real estate, +4.8%, consumer discretionary, +2.6% led the pack as all 11 sectors finished in the green this week.

The Nasdaq Composite closed at 9,731.18 on Friday, representing a weekly +2.2% move and is up +8.5% YTD.

The Russell 2000 moved higher closing at 1687.58 representing a weekly +1.9% gain and is now in the win column up +1.2% YTD.

The “fear gauge” Vix (TVIX) ended at $39.14/share up -2.15% today & down from $43.65/share last Friday’s close.

The FAANG stocks closed as follows on Friday and had an overall postive week of gains:

• Facebook (FB) $214.18/share, +.49% ($212.33/share a week ago)
• Amazon (AMZN) $2,134.87/share, -.7% ($2,079.28/share a week ago)
• Apple, Inc. (AAPL) closed at $324.95/share, +.02% ($320.03/share a week ago)
• Netflix (NFLX) $380.40/share, -.26%, ($366.77/share a week ago)
• Alphabet (GOOG) $1520.74/share, +.20%, ($1479.23/share a week ago)

Economic Reports

On Monday we did not receive any significant macroeconomic data.

On Tuesday, we received the NFIB Small Business Optimism Index Report for January which showed a move up to 104.3. The December Job Openings and Labor Turnover Survey Report confirmed that job openings slid to 6.423M.

On Wednesday, the Treasury Budget Report for January which confirmed a deficit of $32.6B. The budget deficit over the last year period is $1.063T versus $1.022T in December. The weekly MBA Mortgage Applications Index Report showed and move up by +1.1%.

On Thursday, the Consumer Price Index report moved up by +.1% month/month in January. Core CPI rose by +.2%. Total CPI is now up +2.5% year/year. For the week ending February 8, initial claims moved up by 2k to 205,000 while continuing claims for the week ending February 1 moved lower by 61k to 1.698M.

On Friday, we received the total retail sales report which confirmed a move higher by +.3% month/month in January. Import prices were flat m/m in January. Export prices moved higher by +.7%. On a y/y basis, import prices moved up by +.3%. Export prices moved up by +.5%. Industrial production moved lower by -.3% month/month in January. Total capacity utilization was 76.8%. The preliminary University of Michigan Index of Consumer Sentiment for February moved up to 100.9. Business inventories moved higher by +.1% in December.

Investing & Inspiration

“In the short run, the market is a voting machine. But in the long run, it is a weighing machine.” – Ben Graham

“In investing, what is comfortable is rarely profitable.” -Robert Arnott

“The fundamental law of investing is the uncertainty of the future.” -Peter Bernstein

“How many millionaires do you know who have become wealthy by investing in savings accounts?” -Robert G Allen

“Greed is all right, by the way. I think greed is healthy. You can be greedy and still feel good about yourself.”-Ivan Boesky

“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

“I talk about macro themes a lot because they are fun to talk about, but it is the risk management that is the most important thing. The risk control is all bottom-up. I structured the business right from the get-go so that we would have lots of diversification.” -Michael Platt

“Blaming speculators as a response to financial crisis goes back at least to the Greeks. It’s almost always the wrong response.” -Larry Summers

Tomorrow

Markets are closed on Monday in observance of President’s Day.

We are due to receive the following significant economic data next week:

• The minutes from the January Federal Open Market Committee (FOMC) meeting on Wednesday
• The inflation numbers on Wednesday
• The preliminary Purchasing Managers’ Index on Friday.