The Russell 2000, AAL, TRIP, & STNE Advance on Wednesday

We are currently experiencing one beautiful day after another here in San Francisco and today was no different and I hope to get outside soon. However, I can only believe through experience that the fog must roll back in soon and cool us off but we will definitely do our best to enjoy it while it lasts.

Today’s markets were all sunny again buoyed by stimulus measures being implemented and the promise of more as Senate Majority Leader McConnell confirmed that a 5th COVID-19 relief bill may be in the cards and will again be discussed in the Senate in June. Vaccine and treatment hopes seem to be speeding up every day helping to breed optimism which is fueling a willingness of investors to invest further in the rebound as increased reopening steps emerging every day as many have thrown caution to the wind and have begun to flock to beaches, parks, streets and basically get back to whatever they feel they need to do to get back to work.

Will the markets also see the fog roll in again and cool off?…Most likely but for now there seem to be attractive value spots within sectors that were crushed during the sell-off i.e. The S&P 500 financials sector which again popped 4.3% & the industrials sector which jumped 3.3%. Today, the S&P 500 closed up 1.48%, and above its 200-day MA of 3000, the Dow gained 2.21% with Boeing (BA) closing at $149.52 up +3.3%, the Nasdaq ticked up .77%, & the Russell 2000 grabbed an impressive 3.11% up nearly 6% in the last 2 days. 

Oil prices took a pause after its recent rebound moving closing down 1.1% at $33.98/bbl. Chevron (CVX) closed at $93.90/share up .64%, Exxon (XOM) closed at $46.24/share up by .72% & Occidental Petroleum Corporation (OXY) closed at $14.42/share up by .14%.  

The popular FAANG stocks lagged again for the most part and closed as follows: Facebook (FB) closed at $229.14/share, down by 1.32%, Amazon (AMZN) closed at $2,410.39/share, down .47%,  Apple (AAPL) closed at $318.11/share up by .44%, & Netflix (NFLX) added 1.23% closing at $419.89/share, & Alphabet (GOOG) closed at $1,417.84/share up by .06%.

The 2-yr US treasury yield ended flat at .17% & the 10-yr yield dropped 2 basis points to end at .68%. The U.S. Dollar Index strengthened by .1% to end at 99.01. 

Gold prices ended at $1,712/oz (-2) while silver prices closed at $17.71/oz (+.16). North American silver and gold producer Hecla Mining Company (HL) closed at $3.27/share up 4.47% while First Majestic Silver (AG) added 3.27% closing at $9.47/share.

The macroeconomic schedule brought forth only one significant report today:

• The weekly MBA Mortgage Applications Index that confirmed a rise by 2.7%

MOVERS

Two reopening plays jumped today along with Brazilian fintech company as follows:

Shares of American Airlines Group (AAL) added another 7.54% today after yesterday’s 14.85% jump to close at $11.98/share. U.S. Global Jets ETF (JETS) closed at $15.99/share up another 4.44% after yesterday’s +11.8% jump.

Shares of TripAdvisor, Inc. (TRIP) closed at $23.35/share up another 6.79% after yesterday’s 15.57% jump. 

Shares of Brazilian financial technology company, StoneCo Ltd. (STNE) closed up 27.38% at $34.01/share after Tuesday’s announcement that quarterly revenue was up 33% to $134M. 

TOMORROW

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

• The weekly Initial and Continuing Claims report
• The Durable Goods Orders Report for April
• The second estimate for Q1 GDP
• The Pending Home Sales for April

WATCH LIST

• Keep an eye on INVO Bioscience (INVO) which was recently funded and saw their 1-20 reverse split take effect today and will be trading under the symbol INVOD for the next 19 days. They now have ~7.8M shares in this newly minted low or tight float play.

• I am also looking for Atossa Therapeutics (ATOS) to possibly hit us with further news regarding their COVID-19 treatment program this week or next. Recently ATOS announced the successful results from in vitro testing of AT-H201, Atossa’s proprietary COVID-19 drug candidate. 

Economic Reports

• On Monday, it was Memorial Day so now reports surfaced.
• On Tuesday, we received the following reports:
  • The New home sales report confirmed an increase by .6% month/month on lower selling prices to a seasonally adjusted annual rate of 623k and on a year/year basis new home sales are now down 6.2%.
  • The Conference Board’s Consumer Confidence Index came in at 86.6 for May and increasing from April as reopening measures tick forward
  • The FHFA Housing Price Index for May confirmed a rise by .1%
  • The S&P Case-Shiller Home Price Index jumped 3.9% year/year in March
• On Wednesday, we received the weekly MBA Mortgage Applications Index that confirmed a rise by 2.7%

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 provide the following:

• The weekly Initial and Continuing Claims report
• The Durable Goods Orders Report for April
• The second estimate for Q1 GDP
• The Pending Home Sales for April