Dow Reclaims 23,000 as Stocks Rise 3%

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▪ Sheraz and Kevin Cook Agree to Disagree: Forecasting the Decline and Recovery. What models to use to navigate the next few months as the stock market rushes back and forth forecasting its own predictions
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There were no late-session shenanigans on Wednesday. Instead, not only did the market hold onto its gains, but it also strengthened them in the final hour on hopes that this virus’ days are numbered.

After squandering a more than 900-point advance yesterday, the Dow came roaring back today to finish above 23,000 for the first time since March 13.

The index jumped 3.44% (or nearly 780 points) to 23,433.57.

Meanwhile, the S&P rose 3.41% to 2749.98, while the NASDAQ reclaimed 8K by jumping 2.58% (or about 203 points) to 8090.90.

The indices each finished near their session highs and are up approximately 10% this week after Monday’s rally and Tuesday’s slight losses.

After weeks of fear and pessimism, stocks have been looking on the brighter side this week as the number of new coronavirus cases appear to be slowing in the U.S.

Nevertheless, deaths remain high, especially in hard-hit New York City. President Trump had warned last weekend that this would be a bad week for deaths.

However, the market seems to finally be looking forward. If the number of new cases and hospitalizations decline, then so will the number of deaths.

And if this outbreak turns out to be less severe than previous models (which called for deaths of between 100,000 and 240,000), then the economy may be able to open up sooner than originally thought.

When the market is able to recover, though, is a different question. While we’re all relieved by recent encouraging news, many investors are concerned that the market is getting ahead of itself. It could still be a while before the “all clear” is given, and nobody knows how quickly things will get back to normal.

But at least we’re finally starting to talk about the end of the coronavirus!

By the way, don’t forget that this is an election year. The market also got a little help today when Senator Bernie Sanders suspended his campaign for president. The market feels most comfortable with a Trump vs. Biden contest... and that's what we're going to get.

So here we go again. The market will try for back-to-back positive sessions on Thursday. It’s also the last day of the week, since the markets are closed for Good Friday.

Therefore, a positive session tomorrow will also ensure double-digit gains for the week…

Today's Portfolio Highlights:

Home Run Investor: Dropping from more than $30 to $18 is pretty bad… except in this market environment! You could say that a company with such a decline held up rather well during one of the sharpest plunges in history. That’s one of the reasons why Brian bought Renewable Energy Group (REGI) on Wednesday. This Zacks Rank #2 (Buy) produces and sells biofuels and renewable chemicals. The editor was impressed that the stock wasn’t destroyed in the crash and likes the diversification it brings to the portfolio. Plus, its forward PE of only 4.6x and growth of 95.9% last quarter explains why it earns Style Scores of “A” for Value AND Growth. Read the full write-up for more on today’s addition of REGI.

In other news, this portfolio scored the top two winners of the day among all ZU services. Fiverr International (FVRR) soared nearly 30% after guiding higher, while Novavax (NVAX) jumped 15.3% after moving up their timetable for coronavirus testing.

Stocks Under $10: The communications names have been doing rather well, so Brian decided to add some exposure to that space as he works to fill up the portfolio. On Wednesday, he bought Telenav (TNAV), a Zacks Rank #2 (Buy) provider of location-based services such as voice-guided navigation. If you were around last year, you may remember that the portfolio made 30% on this stock from February through May 2019. Well, the editor is coming back for more and this time has a much better entry point. TNAV beat earnings expectations by 266% in its most recent report, leading earnings estimates for this quarter and this year to advance into profitability. It’s also got a good valuation. Read the full write-up for a lot more on this new addition.

All the Best,
Jim Giaquinto

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