You Can Run on for a Long Time
Sooner or later, the market will cut you down.
Despite the foreboding song of the day, we’re not talking about doom and gloom again today. With all the floods, plagues, fires, swarms of locusts and murder hornets, I just couldn’t resist a reference to the man in black.
(Also, “Bingo!” for those of you playing Revelations 2020 bingo.)
We’ll also overlook President Trump’s “Some wacko in China…” tweet. Well, for now, at least. That zinger is sure to come up again when U.S.-China trade talks resume.
Today, dear readers, we’re talking about hope. You see, in spite of mountains of abysmal U.S. economic data, many businesses on Wall Street are thriving.
Retailers such as Walmart Inc. (NYSE: WMT), Lowe’s Companies Inc. (NYSE: LOW) and Target Corp. (NYSE: TGT) have emerged as unlikely standouts in the stay-at-home pandemic market.
First-quarter earnings results from these key retail players appear to hold up just fine — at least by the measures set by lowered analyst estimates.
If the Walmarts, Lowes and Targets of the world are doing fine, so too must the U.S. consumer.
And with states across the country reopening their economies, loosening travel curfews and relaxing gathering restrictions, those gains will continue to grow.
That appears to be Wall Street’s logic, anyway.
What’s more, vaccine hopes from Moderna Inc. (Nasdaq: MRNA) and Inovio Pharmaceuticals Inc. (Nasdaq: INO) bolster Wall Street’s confidence that the COVID-19 crisis will all be over soon.
Jim Paulsen, chief investment strategist at Leuthold Group, best summed up Wall Street’s hopes and dreams by saying: “Coupled with a virus headed into its weak summer season and vaccine trials in full go, perhaps the stock market could be supported by something other than liquidity injections and fiscal juice.”
In one statement, Paulsen (His name is Robert Paulson) admitted that the market is almost entirely supported by unlimited Fed stimulus and Wall Street’s belief that the crisis is almost over.
I mean, sure, we’ve had one pandemic outbreak, yes … but what about second pandemic outbreak?
I digress … we’re here to talk about hopes, dreams, rainbows and puppies.
After all, the market rallied again today. The Dow rallied roughly 300 points and is now knock, knock, knockin’ on a potential breakout to even greater gains — aka the 25,000 area. Will the market finally break out? Or will we reverse once again in a spectacular display of volatility?
Clutch your puppies close, this is still a bumpy ride.
If you want real optimism — and not that shiny “museum gift shop” optimism that wears off in a few days — look no further than Banyan Hill’s own Paul !
Thousands of Great Stuff readers already cherish the research and insight in Paul’s Profits Unlimited newsletter. (Not you? Click here to join the “in” crowd!)
But Paul’s optimism for the market’s future knows no bounds. And he’s about to prove it with a special event where he’ll reveal his strategy to make money in any market.
The “300 Event” is next Tuesday, May 26 — online, of course — and Great Stuff wants to make sure you have a front-row seat for free. (Wait, aren’t all online seats front row? Quiet, you…)
You’ll see the details behind Paul’s all-weather strategy and how you could potentially see a 300% gain from a single stock.
Good: Just a Bit Outside
The retail giant beat Wall Street’s first-quarter earnings and revenue expectations. Target also received a fair amount of premarket hype surrounding its 141% surge in online sales, which helped boost same-store sales growth by 10.8%.
But everyone knows those targets were cut due to the pandemic. And when you get right down to it, earnings fell 61.4% year over year. Target also shelled out $500 million for safety measures, cleaning and higher pandemic wages.
The company also did not provide any guidance on the current quarter or the rest of the year. “There’s just so much uncertainty as I think about the balance of the year … Obviously we’re watching closely to see what happens from an economic standpoint,” CEO Brian Cornell told reporters.
That lack of certainty was more than enough to keep TGT bulls just a bit outside of today’s market rally.
Better: Get Lowe’s, Get Lowe’s, Get Lowe’s
Three, six, nine, stand real fine. Lowe’s earnings sock it to you one mo’ time.
To the window, to the wall, Lowe’s beat analyst expectations by a mile. First-quarter earnings came in at $1.77 per share on revenue of $19.68 billion. Wall Street was looking for $1.32 per share on $18.32 billion in sales.
Same-store sales spiked 11.2%. Online orders surged 80%. Gross margins expanded and fixed costs fell. And while the company didn’t offer guidance for the rest of the year, Lowe’s said that retail strength continued into May.
Take that, Home Depot Inc. (NYSE: HD).
LOW kicked off the day with a 5% gain, but profit-taking quickly gobbled up the day’s progress. The stock is up roughly 80% from its March lows, so many investors were probably eager to bank that cash. If you don’t hold LOW already, a continued contraction might be your opportunity.
Best: Inovio Too Slow-vio
And then there were two.
We’re talking vaccine contenders today, and Inovio just turned up the heat in its neck-and-neck race with Moderna.
One-time Great Stuff pick Inovio Pharmaceuticals announced today that “its COVID-19 vaccine candidate demonstrated neutralizing antibodies in animals,” namely mice and guinea pigs.
The results come from the biotech’s preclinical study … and right after Moderna already found positive phase 1 results. Inovio’s phase 1 clinical trials are also underway at the moment, but we won’t hear early data from that study until June.
Yes, Moderna beat Inovio to the phase 1 punch. But while Wall Street only focused on the “vaccine hope” side of the equation, I’m also making a note that the great biotech race just got a whole lot slimmer. Our two front-runners are here.
The one thing we can count on is that, no matter which company makes it to the market first … people will still get in a tizzy and call it a fake.
In last week’s Poll, we asked you about unlimited stimulus — and the problems that may follow.
While the majority of Great Stuff readers are eager to accept more gobs of cash, I’m proud that you also foresee the runaway effects of the brrrr-ing money printers.
With floods of new millennial cash at the ready … I can tell you with certainty that a hefty chunk of those stimulus checks landed right in the market, and the biotech sector in particular is blowing up big (obviously).
You’ll notice that we’ve been on a biotech binge — that is, if you’ve kept up with your Great Stuff this week! (It’s like Wheaties, but financially … nutritious?)
Heck, you and your fellow Great Stuff readers even took back-to-back triple-digit gains from the biotech and health care bonanza of the past few months!
So, that leads us to today’s Poll of the Week…
Have you ever dipped a toe in the highly profitable biotech waters? Or is the pharmaceutical stream movin’ much too fast for you? Click on the icon above to make your voice heard!
By the way: If you’re itching to see cutting-edge biotech potential for yourself, all you have to do is click right here.
Great Stuff: Greater by the Day
Phase 1 results here, preclinical trials there — every day, we see more biotech everywhere!
And you know what else gets even greater each day? The feedback that you and your fellow Great Stuff readers have sent in!
That’s right: Our inbox is close to overflowing with greatness, but you can bet there’s always room for one more message. So, why not drop us a line?
Send us a message at GreatStuffToday@BanyanHill.com, and you might see your email in tomorrow’s edition of Reader Feedback! Remember, you can always catch up on the latest Great Stuff on social media: Facebook and Twitter.
Until next time, stay Great!
Joseph Hargett
Editor, Great Stuff
