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▪ Tracey and Neena Agree to Disagree on ESG or more pure Clean Energy ETFs, and whether investors really understand them or are just following a hot trend
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▪ Kevin Cook and Dan Laboe choose one portfolio to give feedback for improvement
▪ And much more
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We saw another humongous move in the market on Tuesday, but this time the direction was upward as stocks took back most of yesterday’s history-making selloff.
And it certainly wasn’t a straight shot higher. The Dow started the session by rallying more than 900 points, before giving it all back and slipping into the red before noon. However, it bounced from there and reached another gear in the final hour.
When it was all said and done, the Dow had soared nearly 4.9% (or about 1167 points) to 25,018.16. The NASDAQ rose 4.95% (or about 393 points) to 8344.25 and the S&P jumped 4.94% to 2882.23.
Stocks have been routinely moving 3% or more since the market really started worrying about the spreading coronavirus and its impact on the global economy.
One of the main reasons for today’s soaring results was discussions on Capitol Hill for a fiscal stimulus package to fight the economic impact of the sickness. Specifically, the idea of a payroll tax cut has been suggested.
It was also helpful to see oil prices surge approximately 12% after plunging nearly 25% on Monday when Saudi Arabia cut selling prices for crude in April.
But equally as important as everything else, the market’s impressive rally on Tuesday may simply be a bounce back from shedding over 2000 points on Monday.
Let’s recall that each of the major indices plunged by more than 7% yesterday as oil concerns and coronavirus fears formed a tag team.
So we were due for some kind of rebound. And at this time of extremes, that means soaring nearly 5% and still recovering just a little more than half of yesterday’s pullback.
Maybe we can close that gap even further tomorrow.
Even with the huge declines over the past few weeks and the massive plunge yesterday, the editors were still not ready to buy on Monday. However, there was some action today!
We still don’t know if the bottom has been reached, but you can’t sit on the sidelines forever. The editors have been waiting for a chance to put their money to work… and today they got an opportunity.
Today's Portfolio Highlights:
Commodity Innovators: With energy bouncing back after yesterday’s massacre, Jeremy would love to pick up a few oil stocks. But not quite yet. Instead, he’s getting involved in a different energy market that plunged to 21-year lows yesterday before rebounding 4%. That commodity is natural gas, which the portfolio entered today by adding The United States Natural Gas ETF (UNG) and VelocityShares 3X Long Natural Gas ETN (UGAZ). The editor felt that bounce yesterday was really positive and “could be the beginning of a change in the macro trend.” If that’s true, these funds will help the service take advantage. Read the complete commentary for specifics on today’s new positions. NOTE: UGAZ soared 17% on Tuesday.
Income Investor: The portfolio couldn't wait until Thursday to make a couple moves in this mini rebound. On Tuesday, Maddy added Kroger (NYSE:KR) and Automatic Data Processing (ADP (NASDAQ:ADP)). Being a grocery giant and a payroll processor, respectively, you wouldn’t think these stocks have much in common. However, they both have attractive valuations and solid dividends. Plus, KR is coming off a “stellar” earnings report with strong same-store sales growth and an encouraging 2020 outlook, while ADP’s professional employer organization (PEO) keeps revenue growing in good times and bad. Read the full update for more on these new buys.
Counterstrike: Shares of Stamps.com (STMP) soared by 80% after its quarterly report last month, which included a triple-digit earnings surprise. But this provider of Internet-based postage has returned to earth and fallen to a key Fib retracement level where it seems to be holding. Jeremy decided to take a chance and buy a 10% allocation in STMP, which looks to correct last year’s collapse. See the complete commentary for more on this new buy.
TAZR Trader: Last Thursday, the portfolio sold half of Alteryx (AYX) for a 57% return amid all the market craziness. Well today, Kevin’s ‘favorite mid-cap big-data analytics play’ is again a Zacks Rank #2 (Buy) and trading at 10X next year’s sales in this bounce back. The editor decided to add to the AYX position. Get more specifics in the full write up. By the way, yesterday's addition of QQQ 3X Bull (TQQQ) came at just the right time, as the position was one of the big winners today by soaring 15.6%.
Zacks Short List: The portfolio changed four positions in this week’s adjustment. Of those stocks that were short-covered, all of them brought positive returns amid this market volatility. Even more impressive, three of them were double-digit profits! Those names that left the portfolio today included:
• Occidental Petroleum (NYSE:OXY, +62.1%)
• Wynn Resorts (NASDAQ:WYNN, +31.9%)
• Gardner Denver (IR, +25.9%)
• World Wrestling Entertainment (WWE, +3.2%)
The new buys that filled these open positions were:
• BioMarin Pharmaceutical (BMRN)
• Mimecast Ltd. (MIME)
• Spirit Aerosystems (SPR)
• The Trade Desk (TTD)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Have a Good Evening,
Jim Giaquinto
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