Bye, Bye, Bull Market Ride
A long, long time ago … I can still remember how that bull market used to make me smile. And I knew if I had my way that I could make those winning trades, and maybe we’d be happy for a while.
But March made me shiver, with every issue of Great Stuff I’d deliver. Bad news on the doorstep. I couldn’t take one more step…
Dear readers, I do have some happy news, unlike the girl who sang the blues. But first, we need to talk about U.S. weekly jobless claims.
The U.S. Department of Labor reported this morning that initial claims for unemployment benefits jumped by 70,000 to reach 281,000 last week. It’s the highest such reading since September 2017, but it’s rather unremarkable otherwise.
The problem arises when we look at early jobless claims reports for next week. Reports from Ohio put claims at nearly 78,000 in the past three days. Connecticut has about 30,000, and Illinois is looking at more than 41,000 claims.
We’re already well beyond last week’s 70,000-strong bump, and that’s only with partial data from three states. Next week, those claims will be there all in one place, like a generation lost in space. But there’s still time to start again…
So, come on, Steven be nimble, Steven be quick. Steven Mnuchin, U.S. Treasury Secretary, wants Congress to hand out cash real slick. ’Cause cash is the public’s only friend — apparently.
The current plan ol’ Steven is pushing will send $1,000 checks to most adults, with an additional $500 for children to help blunt the coronavirus’ economic impact. And, if you’re worried about government debt, Steven says we’re covered. The U.S. government can just take advantage of low interest rates to refinance.
Now, where have I heard that one before…
I went down to the Chinese store, where the virus started weeks before. But the people there said the virus wouldn’t spread.
(OK, that was a stretch.)
For the first time since this whole thing began, China reported that there were no new locally transmitted COVID-19 cases. If China can stop the coronavirus’ spread, so can the U.S.
No, dear reader, while your portfolio may be down — if you’re a Great Stuff regular, your portfolio shouldn’t be down as much — the U.S. is still headed for a reckoning with COVID-19, but today is not the day that we die!
No, sir! It ain’t over.
Nothing is over until we decide it is. Was it over when the Germans bombed Pearl Harbor? Hell no!
Forget it, he’s rolling.
We’ll continue to seek out companies that outperform in this virus-strewn mess (I have a couple today that you need to check out below).
Like Steven Mnuchin said, “we are going to kill this virus” and get back to a “normal world.”
I, for one, welcome our new, normal world. (What is this “normal” you speak of, Mnuchin?)
If you, too, would rather look ahead to a rebuilt, stronger-than-ever America … Paul is already there.
Yes, even in these dark times, Paul is a source of bright, forward-thinking research.
Paul’s “Strong Hands” approach to investing is crucial for times like this. He believes America will emerge from the coronavirus stronger than ever … no matter how long it takes. And the mega trends that he follows (such as 5G and precision medicine) won’t die to market panic.
Going: Shop Smart, Shop Walmart
All right, you frightened investors, listen up. See this? This is our boomstick!
Despite the coronavirus smacking Wall Street around like a wet noodle, Walmart Inc. (NYSE: WMT) is hitting new all-time highs. The world’s largest retailer received two upgrades in the past 24 hours, as analysts project growing sales figures.
Oppenheimer lifted WMT to outperform and set a $125 price target on the stock. “As we have written about previously, grocers have clearly benefited from consumer stock-up activities lately,” the ratings firm said.
Meanwhile, Credit Suisse boosted its price target to $127 from $115. “We see this unfortunate period accelerating structural changes in consumer shopping, possibly by five-plus years,” Credit Suisse said.
In layman’s terms, both say that Walmart should benefit from some sticky traffic following the COVID-19 shopping spree. Ideally, you’d want to wait for confirmation of this shopping trend.
That said, Walmart is holding up remarkably well despite the market’s downturn. This is another stock that should be on your short list for sustainable investments in these tought times.
Going: Holding Apron Strings
Blue Apron Holdings Inc. (NYSE: APRN) is nowhere near as stable as Walmart. But the company is expected to benefit considerably from the shelter-in-place mentality surrounding COVID-19.
Through yesterday’s close, APRN went on a 600% tear higher due to investor speculation. If you’re unfamiliar, Blue Apron delivers meal kits directly to your door. With nothing to shop for and all ingredients included in the kit, you can see Blue Apron’s allure.
Today, the stock is down sharply — you can’t expect early buyers to just sit on 600% gains in this market!
However, that doesn’t mean APRN isn’t worth putting on your short list of companies to watch right now. For confirmation, we’d like to see data confirming an uptick in Blue Apron’s business before diving into this one.
Gone: Your Drug Buddy
Yesterday, I said: “With new companies pushing toward potential vaccines every day, I have to wonder how many of these spiking stocks will hold their ground.”
We’ve learned that hard lesson in the biotech sector with Inovio Pharmaceuticals Inc. (Nasdaq: INO) and BioNTech SE (Nasdaq: BNTX) — both of which fell sharply from their recent vaccine-euphoria-induced highs.
Today, we have another lesson from a name we haven’t heard in a long time: Fujifilm Holdings Corp. (OTC: FUJIY).
Did you know that, in addition to making millions of rolls of 35 mm camera film in the ’80s and ’90s, Fujifilm also makes drugs? It was news to me, for sure.
In 2014, a Fujifilm holding called Fujifilm Toyama Chemical Co. Ltd. developed an antiviral drug called Avigan. The drug was all but shelved in Japan due to risks of fetal deaths and deformities … but that didn’t stop the Chinese from testing it on 200 COVID-19 patients. The drug worked surprisingly well, cutting recovery rates for sick patients by days.
China said it will move ahead with the drug, and the news sent FUJIY stock soaring.
Unfortunately, many investors missed a key bit of information in this story: Fujifilm no longer holds the patent for Avigan in China. We all know what that means — mass generic production in China.
That news is apparently making the rounds today, and FUJIY stock plunged as a result.
The lesson here is to be careful when investing in biotech — especially right now. It’s like dot-com-era speculation, only with vaccines and treatments out there.
It’s time for your favorite part of the week: Great Stuff’s Reader Feedback!
We asked you a lot of stimulating questions this week about the White House, the economy and the coronavirus … let’s see what you had to say:
Panic at the Retirement Home
Is panickin’ an OK game for the elderly? Though, we know we are going sometime, but not ready at this time! Lol
— Era P.
Era, there’s no reason to panic. You’re a strong person who will make it through this just fine.
This is not your time … and the fact that you’re “lol-ing” at this reassures me of that fact. Gotta love that sense of humor in the face of all this. Hang in there, wash your hands and keep Great Stuff updated. We’re pulling for you!
Thank you for calming our nerves and spreading the viral humor.
— Shirley M.
Flattery will get you everywhere, Shirley. I’m glad that Great Stuff can provide an outlet in this viral storm. Thank you for reading!
Put Selling for Profit
Thanks for some laughs in these dark times. Selling WAY out of the money puts on great companies like BRK(B) and buying puts on the IWM keeps me in the market, but I wonder how long the Fed believes it can throw money at this market?
In spite of the billions that it has already thrown at this market, the abyss keeps clamoring for more.
It’s a suckers bet that I wish the Fed had never started.
Hate to say it, but I am in the “shut it down” camp.
NO idea where the bottom is when many (most?) companies’ revenue is going to zero for possibly months.
— Gary W.
Put selling? In this market? You’re braver than I thought, Gary.
As for the Fed, it’s talking trillions now … not just billions. I guess you’ll drop your $1,000 check into your margin account to sell more puts, you mad lad, you. I’m glad that’s working out for you. Hang in there!
Have you written in yet? What’s stopping you? Drop me a line at GreatStuffToday@banyanhill.com and let me know how you’re doing out there in this crazy market.
Until next time, good trading!
Editor, Great Stuff