Bad Week Gets Worse As Morning Rally Falters

The market’s Friday blues returned with a vengeance today, dashing morning hopes of back-to-back daily gains and leaving us with another severe weekly plunge.

We’ve been getting a steady stream of shutdowns for days now, including the states of California, New York and now Illinois. At the same time, we’re seeing the expected increase in coronavirus cases here in the U.S.

Nevertheless, the market was on its way to a second straight positive session this morning with the Dow jumping approximately 400 points. However, the weight of all these problems and the fear of holding through the weekend eventually spoiled the advance. And spoiled it in a big way.

The Dow finished lower by 4.55% (or about 913 points) to 19,173.98. The S&P broke an amazing 8-session streak of 4% moves yesterday, but got right back to it today with a plunge of 4.34% to 2304.92.

And the NASDAQ, which advanced more than 2% on Thursday, dropped 3.79% (or about 271 points) to 6879.52.

The week’s totals were as grisly as you might think. The Dow fell more than 17% over these five days, while the S&P was off 15% and the NASDAQ declined more than 12.5%.

The worst day was Monday when the Dow collapsed by nearly 3000 points.

The government and the Fed have been making moves to try and limit the impact of the coronavirus, but it hasn’t worked yet for longer than a day here or there.

We’ve also got another bill out of the Senate coming our way, which reportedly would include sending $1200 in cash to individuals and $2400 to couples.

What we haven’t gotten yet is any sign that this sickness is weakening here in the U.S…. just the opposite actually. People would feel a lot better about barricading themselves at home if they could see it was working.

And investors would be more comfortable in calming the markets if they could see the light at the end of the tunnel.

We’ll get there sooner or later, but they’ll probably be a lot more volatility in the meantime.

Today's Portfolio Highlights:

Insider Trader: It says a lot when insiders buy their own companies’ stock in a crazy and unpredictable market like this. Though no one can predict the bottom, Tracey is “rolling the dice here” with a few names that have seen insider activity in recent weeks. The new buys are:

• Aimmune Therapeutics (AIMT) – 4 insiders bought in last 2 weeks
• Cloudera (CLDR) -- 1 insider bought
• United Rentals (URI) – 2 directors bought last week

The editor thinks these are names that will be least impacted by the coronavirus, though notes that all areas will feel the pain. AIMT is a small-cap pharma name with a treatment for peanut allergy, while CLDR is an enterprise software platform for industries like engineering, finance and manufacturing. URI is the largest equipment rental company in North America. Each name was added with 10% allocations. The portfolio also sold Service
Master (SERV). Read the full write-up for more on all of these moves.

Home Run Investor: Have you seen the runs at the grocery stores lately? Food and supplies are in demand as people become shut-ins for an indefinite period of time. Therefore, Brian thought that Marten Transport (MRTN) would be a good stock to buy right now. This Zacks Rank #2 (Buy) is a trucking company that specializes in consumer packaged goods that require temperature control. In other words, they transport food. Read the full write-up for more on this new buy.

Value Investor: People may be giving up a good amount of their freedom to fight the coronavirus… but they can’t do without food. Archer Daniels Midland (ADM) is the “supermarket to the world”, and its just the kind of big-cap with long-term business that Tracey is willing to add during another Friday plunge. This Zacks Rank #2 (Buy) has all the classic fundamentals that the editor looks for, but not much growth. However, the portfolio is getting in at 4-year lows after dropping 31% year to date, so Tracey thinks this is a good name to “hide out in” and wait for the rebound. Get more specifics on this new buy in the complete commentary.

Stocks Under $10: Remember before all this coronavirus stuff started, this portfolio was having a real fun time with Maxar Technology (MAXR). In fact, Brian sold it in late February for a profit of approximately 109%. Well, the recent turmoil has cut this space technology solutions company in half, so the editor would like to see if history can (eventually) repeat itself. Read his full write-up for more.

Have a Great Weekend,
Jim Giaquinto

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