Investment

Zacks Investment Ideas feature highlights: SPY, Microsoft, Alibaba, Adobe and Nvidia – Yahoo Finance

Published

4 years ago

April 17, 2020

For Immediate Release

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Chicago, IL – April 17, 2020 – Today, Zacks Investment Ideas feature highlights Features: SPY SPY, Microsoft MSFT, Alibaba BABA, Adobe ADBE and Nvidia NVDA.

How to Navigate the Choppy Markets” data-reactid=”20″>Chicago, IL – April 17, 2020 – Today, Zacks Investment Ideas feature highlights Features: SPY SPY, Microsoft MSFT, Alibaba BABA, Adobe ADBE and Nvidia NVDA.

How to Navigate the Choppy Markets

Twenty-two million have filed for unemployment in the past month, the SBA fund (Paycheck Protection Program) has run dry, the coronavirus global case count tops 2 million, and it will likely be months before the economy is able to open up safely. So, is the S&P 500’s 28% recovery, recouping 50% of its losses, a justified movement?

I think not. I believe it is time to be patient and hold on to your cash. Do not chase this rally.

The recent equity surge is being driven by a few things right now:

The backstop that the government has handed the markets with the $2 trillion CARES act and the Fed’s unprecedented “unlimited QE” initiative.
Analysts are discounting the already anticipated horrendous 2020 earnings as well as adverse economic data and looking towards 2021 where an enormous amount of growth is expected.
An ostensible peak in daily new case rate has given people optimism about when the economy will start opening-up.

We still have a long way to go before the economy is back to normal, and it will be a new normal. Testing on a massive scale is going to be crucial to getting the economy up and running again – testing for the virus as well as testing for antibodies, which would deem someone safe from contracting it.

Currently, less than 1% of the population has been tested for the novel coronavirus, but antibody testing is beginning to ramp up. Abbott Labs is saying that they could administer 20 million of these tests by June. This would still only represent about 6% of the US, and now the media is saying that the FDA is letting ineffective testing kits on to the market.

Why This Rally Can’t Continue

Our economy is not even close to being equipped to open back up again, and if we do it too early, we risk this whole cycle occurring all over again, which could send our country into an economic depression.

Even when we do open up, business will operate differently. Restaurants will have to space out tables and limit the number of patrons. People are still going to be scared to fly and travel abroad. This virus is conditioning consumers, and our consumption behavior will shift as a result.

I believe that the Fed’s unprecedented monetary support has given the markets a backstop, but I do not think that the stock market is accurately reflecting our current economic outlook. It’s going to take more than a year for a vaccine to be widely distributed and probably longer than that for our economy to fully recover.

The markets 12-month forward P/E today is higher than it was at the end of January – where the markets were quite richly valued. Granted, EPS estimates for 2020 are all over the board depending on how optimistic/pessimistic the analyst is, but we know they are going to be bad.

I don’t think that we are likely to test the March 23rd lows because of the Fed’s support, but I see a dip-buying opportunity coming soon.

What I Am Doing

I plan on capitalizing on the likely next leg down. Selling covered call options on your favorite equities is what I see as the safest and probably smartest investment move in this trading environment.

I personally have been loading up on SPY puts with expiration ranging from May 15th to June 19th, to hedge the rest of my equity portfolio. The volatility premium that had these options so expensive is beginning to fall as the market calms and puts are starting to trade at reasonable prices again.

My strategy is to hold puts until the S&P 500 hits the 2650, where I will (hopefully) pull profits from my options and start buying equities. As a disclosure, options are extremely risky financial instruments, and I would not recommend you purchase/write any option contracts unless you understand the risks involved.

On the pullback, I am looking to buy high-quality blue-chip tech stocks with healthy balance sheets and robust outlooks. Tech is what is getting us through this pandemic and it is what will thrive in the post-pandemic economy.

My Shopping List:

Microsoft, Alibaba, Adobe and Nvidia.

Take Away

I am confident that we will be able to purchase them at a discount to what they are trading today. Don’t chase the rally. Patience is the key to navigating these uncertain markets. The equity markets are going to be choppy for the foreseeable future, and the best strategy you can have is averaging down on red days and hold cash on green days. We are back to the good old buy the dip mentality.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

>” data-reactid=”52″>Today, See These 5 Potential Home Runs >>

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

Published

1 week ago

September 6, 2024

Anne Joseph

TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets also higher

Published

2 weeks ago

August 29, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 171.41 points at 23,298.39.

In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

This report by The Canadian Press was first published Aug. 29, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Investment

Crypto Market Bloodbath Amid Broader Economic Concerns

Published

1 month ago

August 5, 2024

Harry Miller

The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.