The new law is a daunting 880 pages long, but it contains lots of good news for individuals and businesses, including meaningful tax relief. This column explains one tax-relief measure that can potentially benefit many IRA owners. IRA owners who are adversely affected by the coronavirus pandemic (and there will be plenty of them) will be eligible to take tax-favored coronavirus-related distributions from their IRAs.
The bank’s analysts identified companies with strong fundamentals that are attractive because of ‘indiscriminate selling.’
Company executives have been heavily buying all the areas that will supposedly get hit the hardest by coronavirus and COVID-19.
John Rogers, chairman of Ariel Investments, cited Sir John Templeton, urging investors to take advantage of the stock market’s recent plunge.
Warren Buffett said earlier this month that he hadn’t seen anything like the coronavirus pandemic. “If you stick around long enough, you’ll see everything in markets,” he told Yahoo Finance. “And it may have taken me to 89 years of age to throw this one into the experience.” It’s only gotten worse from there.
ABT stock is one of the biggest diversified medical stocks behind Johnson & Johnson and Roche. As it aims for clearance of its Freestyle Libre 2 system, is it time to buy Abbott stock?
The question investors must now ask themselves is whether or not the market has already hit the bottom of this bear market, or whether investors should prepare themselves for worse to come.
Exxon (NYSE:XOM) pays $3.48 per share in dividends to its shareholders. Will the dividend be cut? So far, not. So the dividend yield for XOM stock is 9.8%. This is a rare bargain.Source: Harry Green / Shutterstock.com Exxon has made no statement that it is cutting the dividend since the coronavirus pandemic ramped up. In fact, since the price of oil fell out of bed in the past two months, it has not indicated any such cut.It has been almost two months since Jan. 29 when Exxon last declared a $0.87 per share dividend. Moreover, this is the fourth quarterly dividend for XOM stock at this rate.InvestorPlace - Stock Market News, Stock Advice & Trading TipsExxon usually increases its quarterly dividend by the fifth quarter. The next quarterly dividend is not likely to be declared until late April or early May. * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem So if Exxon was going to signal a dividend cut it will happen within the next month or so. So far no bad news. Exxon Can Afford Its DividendLast year, Exxon generated almost $30 billion ($29.7 b) in free cash flow from operations (CFFO) before its capex spending. Since then the price of oil and gas has fallen at least 35 to 40% on average. So we can assume that going forward the CFFO will be at least $18 billion or so.Here is the thing. The dividend costs about $3.51 billion per quarter or $14 billion per year, and we haven't figured in the capex spending yet.Last year, Exxon spent a whopping $24.4 billion on capital expenditures. So, if the dividend and capex spending stay level, the company has to fund $48 billion. But it only produces $18 billion.At some point, Exxon has to address this shortfall. Maybe it thinks energy prices will rise. Or perhaps it will cut its capex spending drastically. Or lastly, Exxon could potentially handle the shortfall after capex spending with an increase in debt.Let's look at these possibilities. How Much Capex Can Exxon Cut?A Seeking Alpha author recently wrote an article describing how much capex the company could cut. He points out that in 2014 Exxon cut its capex from $30 billion to $10 to $15 billion a year within two years.The author feels that Exxon could do the same thing again within a year. He also feels that if the company needed to borrow to handle the transition, it could do so.He points out that the company has a very high interest coverage ratio. In addition, Exxon was able to borrow $1.25 billion in the commercial paper market with a low 2.4% coupon.So, theoretically, if CFFO stayed at $18 billion, which is not likely, and the dividend cost $14 billion, this would leave room for only $4 billion in capex. That is too low, and so Exxon would likely borrow $6 billion annually to cover capex spend of $10 billion for the year. The Bottom Line on XOM StockI am the first to point out that an abnormally high dividend yield is often the sign of an impending dividend cut. But in this case, I don't believe that will happen.For one, Exxon has stayed mum about a dividend cut. I believe it will likely keep the dividend level, and not raise it at the end of April, as might otherwise be expected.On the other hand, Exxon clearly has to address the issue of its huge capex spending. This cannot stay the same if the dividend is not going to be cut.In addition, most of the other major oil producers have already announced operating expense cuts, capex cuts, and buyback eliminations or cuts. Exxon does not have a significant buyback program. I expect that it will address these issues fairly soon.Until then, I would bet that XOM stock will be a good investment at these prices. It represents a huge bargain with its 9.8% dividend yield.As of this writing, Mark Hake, CFA does not hold a position in any of the aforementioned securities. Mark Hake runs the Total Yield Value Guide which you can review here. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem * 5 Bank Stocks to Buy Now Because This Isn't 2008 Again * 12 Stocks to Buy That Are Already Positive The post Exxon's Safe Dividend Makes XOM Stock a Bargain Right Now appeared first on InvestorPlace.
Believe it or not, this isn't the first time the stock market has crashed. Sure, the coronavirus from China is a unique foe that the stock market has yet to face. But, so was the housing crisis back in 2008. So was the Dot Com Bubble back in 2000. So was the Flash Crash of 1987.The stock market beat all of those crises. It will beat the coronavirus crisis, too. So, instead of running away from the markets during this time, history actually says that now is the time to look for stocks to buy.And what better place to find strong stocks to buy than in the group of stocks that survived the 1987, 2000 and 2008 crashes?InvestorPlace - Stock Market News, Stock Advice & Trading TipsThese are what I call "survivor stocks." They've been around the block around a few times. Stock market crashes. Economic recessions. They've seen it all. And, through it all, these stocks have not just survived, but actually thrived, rallying to all-time highs after each and every bear market since 1987. * 7 U.S. Stocks to Buy on Coronavirus Weakness With that in mind, some of the best stocks to buy that should survive the coronavirus crisis include: * Nike (NYSE:NKE) * Apple (NASDAQ:AAPL) * Starbucks (NASDAQ:SBUX) * Microsoft (NASDAQ:MSFT) * Disney (NYSE:DIS) * McDonald's (NYSE:MCD) * Walmart (NYSE:WMT) Stocks to Buy to Survive the Coronavirus Crisis: Nike (NKE)Source: pixfly / Shutterstock.com Over the past 35 years, global athletic apparel maker Nike has seen a crisis or two -- and each time, NKE stock overcame the crisis, and proceeded to rally to all-time highs as soon as the crisis cleared up.During the Flash Crash of 1987, NKE stock dropped 35% in a few months. By early 1988, the stock had rallied back to new all-time highs. Fast forward a few years. During the 1990 Recession, the stock dropped 45%. By early 1991, it was back at all-time highs.Then, in the late 1990's around the Dot Com Bubble, Nike dropped 60% in 1997/98. Shares were choppy for a few years, but then hit new all-time highs in early 2004. The Financial Crisis of 2008, meanwhile, took NKE stock down by about 45%. By early 2010, shares were back at all-time highs.Time and time again, Nike has trumped crisis after crisis, and come out the other side a better company than before.The coronavirus crisis will prove no different. NKE stock has dropped 30% in the wake of this new pandemic. But, this is still the world's No. 1 athletic apparel brand, with huge demand across the globe. That demand is temporarily depressed. Nike has the liquidity to weather this temporary depression. Once the virus passes, demand will come roaring back. So will Nike. Apple (AAPL)Source: Primakov / Shutterstock.com Much like Nike, technology giant Apple has weathered every financial and economic storm since 1985.During the Flash Crash of 1987, AAPL stock dropped more than 50%. It was back at all-time highs by early 1991. When the Dot Com Bubble burst in 2000, AAPL stock tanked 80%. It recovered all those losses, and hit new all-time highs by late 2004. During 2008/09, the stock plummeted 60%. By late 2009, the stock was making new highs.In other words, AAPL stock has taken its fair share of beatings over the past 35 years. But none of them knocked the stock out. Instead, each time, Apple punched back, and ultimately won the fight.This crisis will produce a similar outcome. With over $100 billion in cash, Apple is equipped with enough resources to weather the current storm, even if it drags on for several quarters. Even further, the company has huge catalysts on the horizon (including a 5G iPhone launch towards the end of the year), and its production facilities in China are coming back online. * 7 Buyout Targets to Watch for in 2020 By the end of 2020, it's likely that AAPL stock runs back to all-time highs. Starbucks (SBUX)Source: Grand Warszawski / Shutterstock.com In becoming the world's No. 1 retail coffee chain over the past 20 years, Starbucks has seen its fair share of economic downturns. None of them inflicted permanent damage on the company or the stock.During 2001, amid a broader economic slowdown coming out of the Dot Com Bubble bursting, SBUX stock lost about half of its value. By early 2002, the stock had doubled from its lows, and was making new highs. During 2007/08, SBUX stock fell even harder, losing about 80% of its value. By early 2011, though, shares were yet again making new highs.Today, the stock is down about 30% -- matching its biggest drop since the Financial Crisis.Much like it has with the previous crises, Starbucks will weather the coronavirus pandemic. Indeed, thanks to its exposure to China, Starbucks already has a playbook for how to navigate through this crisis. That playbook will help the company weather the coronavirus storm in Europe, Latin America and the U.S.And, when the virus passes within the next few months, pent-up consumer demand will turn into robust sales growth at the coffee chain, which will translate into big share price gains. Microsoft (MSFT)Source: NYCStock / Shutterstock.com Technology giant Microsoft has survived through four major economic and market downturns over the past 35 years, and appears well-equipped to similarly survive through this downturn.First, in the back half of 1987, MSFT stock shed 50% of its value in a few months. By early 1990, the stock was back at all-time highs.Second, during the 1990 Recession, the stock dropped 35%. It was back at all-time highs by early 1991.Third, when the Dot Com Bubble burst in 2000, shares dropped 65%. It took forever for shares to climb back to those lofty levels … but they did, by 2016.Fourth, during 2008/09, MSFT stock dropped 60%. Shares reclaimed their 2008 highs by late 2013. * 10 Undervalued Stocks Crashing on the Coronavirus Pandemic With $134 billion in cash on the balance sheet and robust demand tailwinds in its cloud computing business, Microsoft appears well-equipped to both weather this current economic downturn, and come out the other side with a ton of firepower. Ultimately, that means MSFT stock will reclaim its 2020 highs at some point in the foreseeable future. Disney (DIS)Source: chrisdorney.Shutterstock.com Global media giant Disney isn't new to the whole recession thing. The company has seen several of them since 1985. Obviously, none of them killed the company, because Disney today is as big, powerful and important as the company has ever been.In 1987, DIS stock dropped 42%, before rebounding to all-time highs by mid-1989 Similarly, in 1990, DIS stock shed 35%, before rebounding to all-time highs by early 1992.The 2000 crash was worse for Disney -- shares dropped 70% -- and the stock didn't reclaim its highs until 2011. But, during the 2008/09 market meltdown, DIS stock plunged 55% and recovered all of those losses by mid-2010.Today, DIS stock is down 40% from its recent highs, putting this correction broadly in-line with previous bear market downturns in the stock. Much like it did during all previous downturns, Disney will leverage its iconic brand name, strong balance sheet and diverse businesses to weather the coronavirus crisis. McDonald's (MCD)Source: 8th.creator / Shutterstock.com Of all the survivor stocks to buy, perhaps the most historically resilient is McDonald's.In the market downturns of 1987, 1990 and 2000, MCD stock was hit hard, with drops varying from 30% to 75%. Yet, each time, the stock rebounded to fresh all-time highs within four years. Meanwhile, during the 2008 Financial Crisis, MCD stock was hardly impacted, mostly because, by that time, McDonald's was the world's largest fast food chain and consumers still needed to eat, even though the economy was crashing.That same logic applies today. Since 2008, McDonald's has only widened its lead in the fast food segment. Sure, the economy today is shut down (it wasn't shutdown in 2008). But, consumers still have to eat, and not everyone can buy groceries. So, McDonald's drive-thru should be a popular option for millions of Americans and Europeans over the next several weeks. * The 10 Best Value Stocks to Own in 2020 This sustained demand will help MCD stock weather this coronavirus storm. Once the economy normalizes, McDonald's demand trends will normalize, too, and the stock will fly back to new highs. Walmart (WMT)Source: Jonathan Weiss / Shutterstock.com Last, but not least, on this list of strong survivor stocks to buy is Walmart.The general merchandise retail giant is very familiar with recessions and market downturns. The company is also very good at weathering these downturns. In both 1987 and 1990, WMT stock fell off a cliff. But, within a year of each major selloff, the stock was back at all-time highs.Meanwhile, during the 2008 Financial Crisis, Walmart actually fared pretty well, as consumers flocked to discount retailers as their budgets tightened up.It seems Walmart will fare pretty well during this economic downturn, too. Yes, parts of the economy are entirely shut down. But Walmart stores are entirely open. And they are entirely busy, as consumers are panic buying everything from water to toilet paper.So long as the virus keeps spreading, this panic buying will continue. So long as the panic buying continues, Walmart will be able to weather the coronavirus storm.Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been rated one of the world's top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he was long MSFT and SBUX. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem * 5 Bank Stocks to Buy Now Because This Isn't 2008 Again * 12 Stocks to Buy That Are Already Positive The post 7 Strong Stocks to Buy to Survive the Coronavirus Crisis appeared first on InvestorPlace.
It's been an insane month for airlines stocks. Legacy carrier United Airlines (NASDAQ:UAL) has been no exception. UAL stock traded for $90 as recently as January. Last week, it sold for a low of just $18, amounting to an 80% loss of value in scarcely two months.Source: NextNewMedia / Shutterstock.com However, United's fortunes are back on the upswing. The Senate recently approved an emergency economic relief package by unanimous vote. The House of Representatives should vote on the bill in coming days as well.This aid package will provide tens of billions of dollars to the airline industry in the form of cash grants and loans. Traders have rushed to buy back into the airlines. United Airlines stock, for example, has doubled from its low point over the past week, though admittedly the current $33 price is far short of the previous $90 peak.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat said, sometimes when a stock price doubles in a few days, you should take advantage of it and get out while the getting is good. This is one of those cases. While the bailout money will certainly help the airline industry, it's not a cure-all.We're still in the early innings of this economic slowdown, and heavily exposed companies like airlines have plenty more turbulence ahead. Government Bailout and UAL StockThe stimulus package that made it through the Senate is set to give the airlines roughly $50 billion in aid. Bulls have taken that headline number and run with it, bidding up airline , including UAL stock, sharply. * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem But let's slow down for a second. The actual language around the bailout is not fully hammered out and leaves a lot of leeway. Yes, the $50 billion figure seems set. But it's not clear how much of this will be cash grants, and how much will be loans.It also appears to give Treasury Secretary Steve Mnuchin a lot of authority to set the rules on what happens with the $50 billion. Airlines will have to cap executive pay for two years. And perhaps more importantly for shareholders, all airlines will have to suspend dividends and buybacks for at least a year.In case the government aid isn't big enough, or doesn't arrive soon enough, United has also taken other measures to shore up its finances. On Thursday, for example, it announced that it had secured a $500 million term loan from Goldman Sachs (NYSE:GS). United will have to pay back the loan one year from now, which isn't that far into the future. Still, it's a nice chunk of liquidity to hold the company over until operations start to pick back up, hopefully later in 2020. United's Uneven Competitive PositionCompared to the other legacy carriers, United is in a bit of an awkward position. Of the big three, Delta Air Lines (NYSE:DAL) has the best balance sheet by a significant margin. Delta perhaps would have been able to ride out the current storm even before the stimulus bill passed. On top of that, Delta is aggressively cutting back capacity on its routes to save money.American Airlines (NASDAQ:AAL) is in the worst shape of the big three. However, that comes with a hidden risk to United. There's been a great deal of speculation that American could be the first major U.S. airline to go bust. In fact, its bonds were trading in distressed territory heading into the bailout announcement. Assuming air travel doesn't return to normal quickly, American could easily still end up using Chapter 11 to reorganize.That, in turn, would potentially leave United in a situation where Delta has more operational flexibility from the front, while American would be reinvigorated on the other end, putting United in a squeeze.United runs nearly all its routes through hubs, several of which are facing extreme competition. It has relatively little fat to cut in terms of its flying without losing major market share and clientele to the other legacy carriers. Southwest Could Gain At United's ExpenseThere's one more possible risk on the horizon. It appears that Southwest (NYSE:LUV) may reject its bailout funds altogether. Southwest is in fantastic financial shape, and carries hardly any net debt. This would allow it to possibly forego the government aid, and thus avoid the strings attached to it.Southwest could continue operating without having to comply with the higher wages, environmental standards and other regulations attached to the bailout funds. It could also continue to lay off employees -- that's something that the bailout would prohibit.Southwest, you may recall, has been building Denver into its largest hub. This, in turn, is a crisis for United and its own formerly dominant position in the Mile High City. Southwest potentially has a golden opportunity to steal the catbird position at one of United's best hub locations thanks to the coronavirus from China. My UAL Stock VerdictIf you bought UAL stock near the lows over the past week, you got a great entry price. Buying low and selling high is the name of the game. People that bought into last week's panic have earned their reward. But don't overstay your welcome.Bear market rallies, historically, tend to be the most vicious. Traders think all is clear, and then out of the blue, the next wave of selling kicks off. It's too early to say whether we're going to go plunging back to the market lows from a week ago. But if we do, the stocks that are currently riding the bailout-induced sugar high will get crushed.The government's actions are a good first step. However, the economy is still closed for business, and will probably remain that way for quite awhile. The stock market rally this week hasn't cured the virus, nor has it fixed the economy. Travel demand isn't going back to normal levels all that soon, and high-cost levered players like United still have a ton of downside risk.Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek. At the time of this writing, he owned GS stock. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem * 5 Bank Stocks to Buy Now Because This Isn't 2008 Again * 12 Stocks to Buy That Are Already Positive The post Sell the Bailout Rally in United Airlines Stock appeared first on InvestorPlace.
Hope springs eternal—but false hope can be costly. As the disease has spread, fears about the possible death toll and the extent of the economic disaster roiled global financial markets. The Dow Jones Industrial Average rallied more than 20% off its low, putting it in a bull market, at least by some definitions, though it remains down 24.2% on the year.
(Bloomberg) -- China’s trillion dollar asset-management market opens wider this week, forcing BlackRock Inc., Vanguard Group Inc. and other global firms to make a strategic decision: Go it alone or work with an entrenched local partner.While the further liberalization of the investment banking and money management industries in China has been overshadowed by the coronavirus crisis, wealth firms are nonetheless laying out plans to tap a market poised to reach $30 trillion in assets by 2023, according to consultant Oliver Wyman.Starting April 1, they can apply for licenses to set up wholly-owned mutual fund management firms for the first time. Vanguard and BlackRock are among firms going that route, people familiar have said. Other options include boosting ownership of existing joint venture partnerships to 100%, as JPMorgan Chase & Co. plans to do, people familiar have said.“With so many license options and changing policies, one of the biggest questions all foreign players face is where to allocate their resources,” said Jasper Yip, a principal in the financial services practice at Oliver Wyman in Hong Kong. “Asset management could be one of the most competitive sectors because of the opportunities.”Here are the different paths asset managers can pursue in China and how some of them plan to proceed:Wealth Management SubsidiariesThe China Banking and Insurance Regulatory Commission has been encouraging foreign asset managers to work with the wealth management subsidiaries of Chinese banks or insurers. Global players are expected to bring to the table product design expertise, while the Chinese firms provide a vast distribution network and relationship managers.BlackRock is in talks with China Construction Bank Corp. to set up a joint venture for a wealth management subsidiary, according to people familiar with the matter. Goldman Sachs Group Inc. has discussed a similar structure, people familiar have said.“Chinese banks have great distribution channels and client relationships, but many of them lack expertise to create long-term investment products with sufficient risk controls, so they would benefit from working with foreign players,” said Harry Qin, a partner at PricewaterhouseCoopers LLP in Beijing.Wholly-Owned CompaniesThis is the go-it-alone option. China is planning to allow applications for foreign-owned fund management licenses that would grant control of mutual funds. At least six firms, including BlackRock and Vanguard, have told regulators they intend to apply to the Chinese securities watchdog, people familiar with the matter have said.China regulators are trying to shift consumers away from shadow banking products underpinned by loans sitting outside banks’ balance sheets. That’s creating an opportunity for mutual funds that are expected to increase assets by more than 10% annually, according to Oliver Wyman, a unit of New York-based Marsh & McLennan Cos.The fund management licenses will allow global asset managers to sell mutual funds to individual investors. Some firms already hold private asset management licenses that let them target institutional investors and high-net-worth individuals, much like hedge funds.“Wholly-owned fund management licenses will be one of the most sought after options for foreign companies,” said Rachel Wang, director of manager research for China at Morningstar Inc. “It allows them to offer more products and have a wide outreach to different types or sizes of customers.”The potential is significant. Even with the market opening, foreign players are expected to only account for 6% of revenue generated in the asset management space by 2023, according to Oliver Wyman. Still, that small piece of the market could be worth $8 billion.“Chinese regulators are very eager to attract foreign players in the financial sector,” said James Chang, China consulting leader at PricewaterhouseCoopers. “The government thinks the market is big enough for the local players to handle the competition.”Joint VenturesThis is the legacy option. Several investment banks already have mutual fund joint ventures in China. With foreign companies now free to control operations on the ground, it’s unclear whether partnerships still provide value.“Many of the joint venture asset management firms that foreign players set up with their Chinese counterparts have not been performing as expected, partly due to limited product offerings and less than ideal collaboration with the Chinese brokerages,” said Qin from PwC.The solution for some is to buy out their partners. JPMorgan is seeking 100% ownership of its fund management joint venture, people familiar have said. The New York-based bank is in talks with Shanghai International Trust Co. to acquire its stake in China International Fund Management, which oversees 150 billion yuan ($21 billion).Vanguard meanwhile has a robo-advisory joint venture with Jack Ma’s Ant Financial Services Group that started providing mutual-fund recommendations to Alipay app users in late March.JPMorgan Is Said to Seek Full Control of China Fund VenturePrivate FundsA go-slow approach. Foreign companies were first allowed to apply for private fund licenses in 2016. Some 25 firms, ranging from banks to hedge funds and insurance companies, have won these licenses, according to Natasha Xie, a Shanghai-based partner at the JunHe law firm.The private funds run three types of assets: stocks, private equity and pilot programs introduced by the Shanghai and Shenzhen governments that allow global asset managers to raise yuan-denominated funds from qualified clients to invest overseas.“It would make sense for players who can’t commit significant investment or headcount to apply for the private fund management license,” said Xie.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Much has been written about the difficult situation in the Texas shale patch, but the outlook for Canadian oil drillers is much gloomier
The coronavirus crisis has created an extraordinary buying opportunity in emerging market stocks for anyone hoping to save for their retirement, say two independent investment houses. Buy a broad portfolio of inexpensive “value” stocks in developing markets such as China, South Korea, Russia, Brazil, India and you’ve got a good chance of doubling your money or better over the next five to seven years, say number crunchers at investment advisory firm Research Affiliates in Newport Beach, Calif., and at the blue chip money managers GMO in Boston. “Value” stocks are those that are inexpensive in relation to business fundamentals such as company revenues, assets and earnings.
Futures fell as U.S. coronavirus cases surpassed any other country, including China and Italy. Amid a stock market rally attempt, Amazon, Alibaba, AMD, Netflix, GSX are setting up.
Hedge-fund manager David Tepper says there is nothing wrong with “nibbling” at stocks that have experienced a brutal selloff in the past month, amid growing fears centered on the economic impact of the coronavirus pandemic.
Interest rates at zero, record deficit spending and the Federal Reserve’s quantitative easing with no preset limits is the perfect environment for gold.
The Federal Reserve on Monday announced a fresh round of stimulus designed to calm markets and buffer the hit to the economy from the coronavirus pandemic. Among other steps, the Fed said it would buy exchange-traded funds that track the corporate bond market, a first for the U.S. central bank. “This will provide much-needed liquidity to the bond market and to ETFs,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA.
John Velis, a currency and macro strategist for the Americas at BNY Mellon, isn’t convinced the market has reached a bottom.
The coronavirus stock market crash is costing investors. That includes Warren Buffett. But he likely wishes he owned more of three S&P; 500 stocks.
In a plain-vanilla sense, you are probably wondering how to mitigate the volatility in your portfolio, which is freaking out. You could step into your time machine, go back a few months and buy some bonds. All kinds of wacky stuff is happening in the bond market, and bonds aren’t really providing any diversification benefits anymore, as risk-parity strategies unwind.
Several chip stocks are acting well in the coronavirus correction. Nvidia, AMD, Taiwan Semiconductor, Inphi and ASML should be on your watchlist.
High-profile investors from BlackRock Inc to billionaire William Ackman have turned more bullish on equities in recent days, as unprecedented stimulus from the Federal Reserve, a $2.2 trillion stimulus bill signed Friday, and a call by President Donald Trump to get the U.S. back to work in weeks rather than months sparked the biggest weekly rally in the Dow Jones Industrial Average since 1938. "People are trying to time the bottom and that's indicative of an early bear market, when people have hope," said Richard Bernstein, chief executive officer of Richard Bernstein Advisors. Bernstein said he was a "data hawk" and was looking for a combination of "improving fundamentals" - eyeing the basic health of the asset, rather than trading patterns - and "total disbelief," adding that in 2009 investors did not believe the bull market was real.
Today, we are writing about a pattern our research team is seeing in the Gold/Silver ratio which is correlated to the price movement of Gold. What does this mean and how can we profit from this setup?
Stocks extended their gains for the third day in a row Thursday, marking a refreshing change in character for shellshocked investors. Many of the worst-performing industries have seen their constituent's shares come rip-roaring back -- airlines, cruise lines, casino stocks, home builders, restaurants -- you name it.But I suspect the easy part of the oversold bounce is over. While it's possible we continue to melt higher; many equities are pushing into potential resistance zones that are bound to put up a fight. Plus, with their heavy losses now lightened, investors are one scary headline away from heading for the exit door. And that could spark the next descent.Though we could pick any number of potential sectors to sell, we're focusing on casino stocks. They're on the wrong side of the social distancing trend and remain vulnerable to more downside.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem Let's build three bear trades to profit. 3 Casino Stocks to Sell: Wynn Resorts (WYNN)Source: The thinkorswim® platform from TD Ameritrade Wynn Resorts (NASDAQ:WYNN) has doubled off the lows and its chart still looks bearish. Buyers do deserve some credit, though. Volume during the ascent was massive and supports the argument that the March 18 low of $35.84 could be the ultimate bottom of this bear market.WYNN stock fell as much as 77% from January's peak, so you could argue the market priced-in all of the bad juju surrounding the coronavirus. But here's the thing. With such a massive crash, there are bound to be aftershocks. Though possible, I'm betting against casino stocks recovering in a single bound. I think Wynn could probe lower again, even if it ultimately moves higher. And therein lies our opportunity.The Trade: Buy the May $60/$55 bear put spread for around $1.28.Consider taking profits on a push toward $60. Las Vegas Sands (LVS)Source: The thinkorswim® platform from TD Ameritrade The argument for fading the strength in Las Vegas Sands (NYSE:LVS) is identical. While not as robust, its rally off the lows of 59% carried shares directly into the descending 20-day moving average. The underside of an old support zone near $52 was tested Wednesday and Thursday and is now acting as resistance.The past two daily candles ended with topping tails. These long upper shadows suggest sharp intraday bearish reversals and confirm that sellers are gaining strength at these levels. A break below Thursday's low ($46.51) could signal the next descent has begun.The Trade: Buy the May $45/$40 bear put spread for around $1.75. MGM Resorts (MGM)Source: The thinkorswim® platform from TD Ameritrade MGM Resorts (NYSE:MGM) rounds out today's trio of casino stocks to sell. It shares the bearish characteristics mentioned above, but worse. From January's peak to last week's trough, MGM stock crashed 83%, which is insane. The market almost priced-in bankruptcy in a single downswing.After such a horrific slashing, MGM is going to need more than a 159% rebound to save the sinking ship. Investors should be encouraged by the huge accumulation candles seen over the past few trading sessions. But even if the bottom is in, MGM is likely to drop back to test buyers' resolve. I like teeing up bear positions for a quick trade.The Trade: Buy the April $13/$9 bear put spread for around $1.As of this writing, Tyler Craig didn't hold positions in any of the aforementioned securities. For a free trial to the best trading community on the planet and Tyler's current home, click here! More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem * 5 Bank Stocks to Buy Now Because This Isn't 2008 Again * 12 Stocks to Buy That Are Already Positive The post 3 Casino Stocks You Shouldn't Roll the Dice On appeared first on InvestorPlace.