It’s been a while since we started a week with a nice, solid rally, but that’s what we got on Monday with each of the major indices jumping by more than 3%.
And this is coming off one of the best weeks for the market in history with the Dow climbing nearly 13%, the S&P up more than 10% and the NASDAQ ahead by over 9%.
We’ve seen a full court press in recent days against the coronavirus, including actions from the Fed, Congress and local governments across the 50 states.
And yesterday, President Trump extended social distancing to the end of the month. Previously, he floated the idea of opening at least part of the economy around Eastertime (about two weeks), but that always felt like more of a hope than a real goal.
The market obviously appreciated the extension… or at least wasn’t disheartened by it.
Now that we’ve received big monetary and fiscal measures, the market seems willing to let the social distancing “flatten the curve” so the recovery can really take hold with confidence when the economy eventually opens up.
The NASDAQ had the best session thanks to a strong performance from tech. The index soared 3.62% (or about 271 points) to 7774.15. All of the FAANGs were solidly higher, especially Facebook (NASDAQ:FB, +5.8%).
The S&P rose 3.35% to 2626.65 and the Dow is back above 22K after soaring 3.19% (or around 690 points) to 22327.48.
Healthcare was an even bigger winner than tech on Monday as we’ve been getting some good news on medical options to fight the virus. Johnson & Johnson (NYSE:JNJ) got a lot of attention today after identifying a lead vaccine candidate with plans to start clinical trials in September. The stock was up 8% today.
And there are several other companies working on vaccines, treatments and better testing.
Despite the solid start to the week though, energy continues to be a concern. Crude oil dipped below $20 today and finished only slightly above that mark.
So even though coronavirus cases are still growing, the market seems better able to look toward the future now that a good deal of action has been taken. Let’s see if we can get back more of the recent plunge in the days ahead… because we’ve still got a lot of ground to recover and more challenges to overcome.
Today's Portfolio Highlights:
Blockchain Innovators: Working from home is nothing new for eXp World Holdings (EXPI), a Zacks Rank #1 (Strong Buy) real estate business that has already transitioned to the cloud. Most of its agents work from home or a remote office, and they use blockchain to become more like “data miners” that can verify real estate transactions in cyber space. Dave understands that this coronavirus shutdown could wreak havoc with the real estate market, but he’s willing to take a chance for an innovative company that seems on the verge of profitability. The editor is especially encouraged by its sales growth numbers, which are over 46% for this year and another 28%+ for next year. Therefore, the editor added EXPI on Monday.
Insider Trader: Since things are changing so rapidly these days, Tracey is focused on companies that have just released quarterly results. Case in point, Nike (NYSE:NKE) reported better-than-expected results last week, as its online business is “picking up a lot of the slack” from its brick-and-mortar stores being closed amid the coronavirus shutdown. Shortly after the report, one director bought 2500 shares. That may not be a cluster buy, but the editor reminds us that “it only takes one”. The portfolio has plenty of cash, so she added NKE on Monday with a 10% allocation. Shares are still down about 16% year to date, but have come off their lows. Read the full write-up for more on this new addition.
Technology Innovators: Tech shares look to be firming up, which is great news for this portfolio and its increasingly bullish editor. Brian wanted some exposure to the cyber security space, so he added Radware (RDWR) on Monday. The company has beaten the Zacks Consensus Estimate in three of the last four quarters with an average surprise of 28%. It has come off its low beneath $17 during the crash, and Brian thinks it could easily move over $25 in the coming weeks. Read the full write-up to learn more about the addition of RDWR.
TAZR Trader: On the one hand, the market continued to grind higher on Monday. But on the other hand, the VIX is still very high at around 60. This dichotomy is keeping Kevin on his guard. On Monday, he decided this was a good time to trim some risk and raise some cash in preparation to buy again in the next fear-driven dip. The editor banked two double digit winners by selling half of SPX 3X Bull (UPRO) and QQQ 3X Bull (TQQQ) each for gains of 21.7% and 18.4%, respectively. The portfolio also sold half of NVIDIA (NASDAQ:NVDA) for a 7.1% return and half of Alteryx (AYX).
Black Box Trader: The portfolio sold four names in this week’s adjustment, including a double-digit winner. The names that left today included:
• Xcel Energy (NASDAQ:XEL, +25.4%)
• SolarEdge Technologies (SEDG, +6.1%)
• Patterson Cos. (PDCO, +1.3%)
• Booz Allen Hamilton (BAH)
The new additions that filled these spots were:
• Allergan plc (NYSE:AGN)
• Atmos Energy (ATO)
• Newmont Corp (NEM)
• Sprouts Farmers Market (SFM)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Commodity Innovators: The market had a real nice start to the week, but there are still major problems with the price of oil as it continues to plunge. Therefore, Jeremy decided to clean out all the energy names in the portfolio on Monday. The positions that were sold include:
• Scorpio Tankers (STNG, +39.4%)
• Phillips 66 (NYSE:PSX, +13.9%)
• US Natural Gas ETF (UNG)
• US Oil ETF (NYSE:USO)
• US Gasoline ETF (UGA)
Read the complete commentary for more on these moves and what to expect in the future.
All the Best,
Jim Giaquinto
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