Dow Closes Below 20K As Selloff Resumes

The market had no follow-through on yesterday’s stimulus-induced rally, as stocks plunged again on Wednesday with the Dow closing below 20K for the first time in more than two years.

However, the loss narrowed significantly late in the session on a rally sparked by passage of the first relief measure from Congress.

It was still another sharp decline and all the more disheartening coming after Tuesday’s energetic advance, which had some folks hoping that a bottom was near.

The Dow plunged 6.3% (or about 1338 points) to 19898.92 for its first close beneath 20K since early 2017. The index had a nice recovery from dropping by about 2300 points earlier in the day.

The S&P dipped 5.18% to 2398.10 and the NASDAQ slipped 4.70% to 6989.84.

The S&P had been down more than 7% at its worst, which means we tripped a “circuit breaker” for the fourth time in recent days.

The late rally was probably a reaction to the Senate approving the House’s coronavirus bill, which expands paid leave and unemployment benefits. It also includes free testing for the virus.

Meanwhile, the sickness continues to spread and the country continues to close things down, including the US/Canada border and the NYSE trading floor. (The exchange will temporarily move to fully electronic trading.)

Even though this wasn’t the steepest loss we’ve seen in recent days, it feels just as deflating coming after yesterday’s surge. You can actually see the disappointment in the scorecard above, as the editors dumped a lot of names today.

Help is on the way from the government, but there’s not much improvement on the health side… yet.

At some point, we’ll beat the coronavirus, but it looks like we’re going to have to keep our distance to do it and put up with this volatility in the meantime.

Today's Portfolio Highlights:

Commodity Innovators: Buying commodities today? Yep, that’s what Jeremy is doing. Supply concerns in some areas could lead to a spike in price, so the editor picked up the following positions to take advantage:

• Teucrium Sugar ETF (CANE)
• IPath Bloomberg Cocoa Subindex Total Return ETN (NIB)
• VanEck Vectors Agribusiness ETF (MOO)

He also sold VelocityShares 3X Long Natural Gas ETN (UGAZ) and Aberdeen Standard Physical Platinum Shares ETF (PPLT).

Read the full commentary for specifics on all of today’s buys and more.

Short List: This portfolio continues to do its job. With the market plunging again on Wednesday, the service had ALL of the top performers. Those gains included Wynn Resorts (NASDAQ:WYNN, +20.9%), Tesla (NASDAQ:TSLA, +16%), The Trade Desk (TTD, +15.1%), Agnico Eagle Mines (AEM, +12.5%) and IAC/InterActiveCorp (IAC, +11%). Remember, this is an emotion-free portfolio that takes advantage of falling and volatile markets.

All the Best,
Jim Giaquinto

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