The Fed is doing all it can to help the economy through this difficult and unprecedented time, but the Congress can’t say the same thing.
While Washington fumbles around, the market started a fresh week with a fresh selloff after returning from one of its worst five-day stretches in history.
The Dow dropped another 3.04% (or 582 points) on Monday to 18,591.93. The index fell more than 17% last week.
The S&P moved less than 4% today, which has been rare of late since the index moved more than that in either direction for 8 straight sessions recently. However, it was still down 2.93% to 2237.40.
The NASDAQ was in positive territory a few times today, including in the final hour of trading, as tech had a decent session considering all the challenges out there. But it still finished with a loss, though it was only lower by 0.27% (or a little less than 19 points) to 6860.97.
The Fed, which has already made several moves during this crisis, announced several other programs to help keep the wheels of this market moving during this crazy time. One of those programs includes buying unlimited amounts of treasuries and mortgage securities.
The initial response from the market was positive, but skittish investors eventually sold the positive momentum and sparked another selloff. You can blame Congress for a good amount of the slide.
In fact, the best thing the Fed could do from here is to let those folks up on Capitol Hill know that there’s a bit of an emergency in the country right now. The Senate has failed twice in recent days to pass a huge fiscal stimulus package. Twice!
The market is waiting for them to get their act together. Such a plan may be the last bit of good news we get for a while, as we have yet to see a peak in the coronavirus here in the U.S. (though there's been some positive signs in other countries recently). In fact, as testing ramps up, we’re actually seeing a spike in cases.
But we knew this needed to happen before things could get better. We also need that stimulus package to calm the market in the short run.
Let’s hope we get all that’s needed sooner rather than later…
Today's Portfolio Highlights:
Blockchain Innovators: Earnings estimates for Camtek (CAMT) have remained strong even as the share price has slumped during this selloff to around $7 from 2020 highs over $13. Once chips come back into favor, Dave thinks it will benefit this manufacturer of automatic inspection systems for the semiconductor industry. Therefore, the editor added this Zacks Rank #2 (Buy) on Monday. Read the full write-up for more.
Technology Innovators: Companies that help people work from home are doing better in this environment than most, so it only makes sense that a company helping people get healthcare remotely would also be doing pretty well. Actually, “pretty well” might be an understatement. Teladoc Health (TDOC) soared more than 18% today and is on its way to a solid month and a half of growth. Brian was certainly right to add this provider of virtual access to high-quality care and expertise back on March 19. Today, TDOC was the best performing stock among all ZU names.
Black Box Trader: Half the portfolio was replaced in this week’s adjustment. The five names that were sold today included:
• Republic Services (RSG)
• eBay (NASDAQ:EBAY)
• FGL Holdings (FG)
• Texas Roadhouse (TXRH)
• PennyMac Financial (PFSI)
The new buys that filled these spots were:
• Atlas Air Worldwide (AAWW)
• Coherus BioSciences (CHRS)
• Patterson Cos.(PDCO)
• Hain Celestial (HAIN)
• Xcel Energy (NASDAQ:XEL)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Insider Trader: “The Fed launched further emergency measures this morning, which boosted the bulls on Wall Street. Only, they didn’t hold onto the bullishness for long after various states and countries started listing their new coronavirus case counts, and death updates.
“This week is key in the fight against the virus.
“Italy is starting to see a decline in the number of cases, and deaths appear to have peaked, so they may be turning the tide now and starting to flatten the curve. But their quarantine rules have been severe.
“But this can give all other countries hope.
“We do know one thing. If you’re a long-term investor, American companies WILL grow and earnings will rise over the long haul. No war, depression, flu outbreak, terrorist attack, or financial meltdown has stopped that from happening.” – Tracey Ryniec
Until Tomorrow,
Jim Giaquinto
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