“Smiles Everyone” Vista Partners Daily Market Recap – March 2, 2020

Amazing how a weekend and a day can make you feel like there is hope and put a smile back on your face. It’s not quite a “V” formation in the markets yet like I prognosticated at the end of last week, but it was a very good start towards it today! After Sunday’s proclamations from WHO Director-General Tedros Adhanom Ghebreyesus where he stated “Global markets … should calm down and try to see the reality,” the world or at least the portion of the world that invests in the markets seemed to react to his message well and it was once again “game on” or “risk-on” in the markets today. It also helped that we got a boost on Friday from Fed Chair Jerome Powell where he suggested that the Fed would use their tools to support growth and that we (in the markets) started out this Monday at a significant discount across the board from the values that were about ~12% higher 7-10 days ago. There is always more than one reason the market dips or rises I would suggest. Are we out of the woods? Probably not. Are we due for more volatility? Most certainly. Does it make sense to continue investing in the long term? Most definitely.  Interesting also is that US Treasury yields continued to drop today as money still is seeking safety even though the market rose. The 2-yr yield dropped -.016 to end at .911%, the 10-yr yield dropped -.026 to end at 1.16%, the 30-yr yield dropped -1.028 to end at 1.7233%. The U.S. Dollar Index weakened again today subtracting -.62% ending at 97.51.  At the end of the day, Wall Street now seems convinced that the fed will cut rates & maybe as soon as their March 17-18 meeting and the markets believe that cutting rates is good for the markets. 

Today the results of the major indices were as follows: the S&P 500 closed up +4.6%, the Dow Jones Industrial Average gained  +5.09%, the Nasdaq Composite pushed up +4.49%, & the Russell 2000 bumped up a sloid +2.85%.   The beloved FAANG stocks experienced a green day again today. Facebook (FB) closed at $196.44/share, +2.06%, Alphabet (GOOG) closed at $1,389.11/share, +3.72%, Amazon (AMZN) closed at $1,953.95/share, +3.73%, Apple (AAPL) closed at $298.81/share, +9.31% & Netflix (NFLX) closed at $381.05/share, +3.26%.

The Velocity Shares Daily 2x VIX Short-Term ETN (TVIX) closed at $96.90/share off -7.27%. Oil prices also jumped 2.3% to $47.83/bbl.  Gold closed at $ 1,590.70/oz down -.26% and silver prices closed at $16.80/oz up +.36%.

A few other bright spots came in the form of economic data:

• The ISM Manufacturing Index Report for February confirmed an expansion reading of 50.1.
• Total construction spending report also confirmed an increase of +1.8% month/month in January
• The Residential spending report confirmed an upward move of +2.0% month/month
• The nonresidential spending reports showed an increase of +1.6% month/month.

Economic Reports

On Monday, we received the following:

• The ISM Manufacturing Index Report for February confirmed an expansion reading of 50.1.
• Total construction spending report also confirmed an increase of +1.8% month/month in January
• The Residential spending report confirmed an upward move of +2.0% month/month
• The nonresidential spending reports showed an increase of +1.6% month/month.

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:

• February auto and truck sales