Oil Confusion Weighs Heavily on Monday’s Markets

The energy sector, down -3.2%, and specifically the May oil (WTI crude) contract took the center stage today weighing heavily on and confusing many in the markets. In a Barrons article today, the bewilderment was summed up as fairly as possible as follows: “Oil was down more than 200% in late trading Monday. Benchmark U.S. crude oil prices were at negative $25 a barrel. There isn’t anything much new about demand, OPEC or Covid-19. The move in oil futures has to do with factors such as storage limits and expiring contracts. Oil is a commodity, not a stock price. And futures contracts have dates for delivery associated with them. The oil-futures contract for May delivery stopped trading on Monday. The June contract is at $20, so oil will magically be at $20 Tuesday morning.” 

In other words, life and oil consumption will continue to press on again tomorrow and no you will not be paid anytime soon to fill up your gas tanks & oil will indeed remain to have value probably north of the $20 mark. In addition, this confusion today may have set up a nice bounce play in this sector for tomorrow. Big industry players Chevron (CVX) closed at $83.57/share down -4.13% and Exxon (XOM) closed at $41.18/share down -4.72% & Occidental Petroleum Corporation (OXY) closed at $12.59/share down -7.63%. 

The S&P 500 closed down by -1.79%. The Dow declined by -2.44% as two components to sizable hits: Disney (DIS) closed $102.26/share down by -4.1% & Boeing (BA) closed at $143.61/share down 6.75% as a GE leasing sub canceled a significant 737 MAX order. The Nasdaq lost -1.03% & the Russell 2000 slid by -1.28%.

The popular FAANG stocks closed as follows: Facebook (FB) closed at $178.24/share, down by -.56%, Amazon (AMZN) closed at $2,393.61/share, up by +.78%, Netflix (NFLX) added +3.44% closing $437.49/share,  Apple (AAPL) closed at $276.93/share declining by -2.08%, & Alphabet (GOOG) closed at $1,266.61/share down by -1.3%.

The 2-yr US treasury yield rose by 1 basis point to .21% & the 10-yr yield declined by 3 basis points to end at .63%. The U.S. Dollar Index strengthened by +.2% to end at 99.98.

Gold prices ended at 1,706/oz while silver prices bumped higher today closing at $15.42/oz. North American silver and gold producer Hecla Mining Company (HL) jumped +7.37% to end the day at $2.33/share.

We did not receive any US economic reports today.

MOVERS

Here are a couple of stocks that were also in focus in a positive way today:

Shares of Atossa Therapeutics (ATOS) shot up to an intraday high of $2.28/share prior to closing at $2.15/share up +3.86% today on +1.26 million shares of trading volume!! This move came after they announced that they had applied to the FDA for approval to commence a clinical study of its proprietary drug, AT-H201, in COVID-19 patients on mechanical ventilation. AT-H201 is a novel formulation of two pharmaceuticals previously approved by the FDA for other diseases. The goal of the clinical trial, called the HOPE Study, is to demonstrate improved lung function and reduce the amount of time that COVID-19 patients are on ventilators. “One of the most tragic clinical features of the COVID-19 pandemic is the very high mortality rate for patients who require mechanical ventilation,” stated Dr. Steven Quay, Atossa’s President and CEO. “It is our hope that AT-H201 can have an impact in this clinical setting, both to save lives and to get patients off of the ventilator. Although there are over 100 clinical trials for COVID-19 being conducted in the United States, this is the first trial that I am aware of that is testing nebulized pharmaceuticals for patients on mechanical ventilation. Atossa looks forward to working on this important medical need and to reduce the death toll of COVID-19.”

Shares of Shrodinger, Inc. (SDGR) moved to $48.48/share up +19.67% today. SDGR’s physics-based software platform enables discovery of high-quality, novel molecules for therapeutics and materials. Today they announced an expanded collaboration with AstraZeneca focused on refining a biologics modeling solution with the aim of speeding up the development of antibody and protein-based therapeutic candidates. The multi-year agreement extends an existing collaboration in which AstraZeneca is deploying Schrödinger’s computational platform to advance small molecule drug discovery efforts. The new collaboration is aimed at enhancing Schrödinger’s Free Energy Perturbation (FEP+) technology for the optimization of key properties of biologics, such as affinity and selectivity, with particular focus on binding affinity.

TOMORROW

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

• The Existing Home Sales Report for March

Economic Reports

On Monday, we did receive any significant economic reports.

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 Existing Home Sales Report for March