Stocks Jump 2% as Oil Skyrockets

Another wild ride for stocks on Thursday, but an historic day for oil helped the major indices close higher and make up about half of yesterday’s plunge.

Crude oil surged more than 23% today after President Trump said he expects Russia and Saudi Arabia to cut production by about 10 million barrels a day after speaking to the leaders of both countries.

This comes a day before POTUS meets with the bigwigs of several of the largest U.S. oil companies in hopes of helping the industry after getting bludgeoned during this economic shutdown.

Even with today’s epic surge, oil is still just about $25 a barrel. It was approximately $60 at the start of the year.

The Dow soared by more than 500 points on Thursday, but then gave it all up and actually lost about 200 at one point.

Nevertheless, the index mounted a comeback and finished higher by 2.24% (or nearly 470 points) to 21,413.44. It rallied into the close and made up for almost half of yesterday’s approximately 970-point drop.

The S&P was up 2.28% to 2526.90 and the NASDAQ rose 1.72% (or around 126 points) to 7487.31.

These gains were made despite another rough reading for jobless claims. Remember how aghast everyone was with last week’s 3.3 million new claims? Well, this week’s report doubled that to 6.6 million, or approximately 10 million in two weeks.

Speaking of jobs reports, the government employment situation is scheduled for tomorrow. Its not expected to show the full impact of the government shutdown, but it should be pretty disappointing when compared to how historically low unemployment was before the coronavirus came to town.

Believe it or not, the major indices go into tomorrow’s session only marginally lower for the week. Remember that stocks jumped by 3% on Monday.

Of course, with the jobs report coming and the market susceptible to the Friday blues during this outbreak, it would be quite a surprise if stocks could rally enough for another week of gains.

Then again, the market’s been pretty surprising lately!

Today's Portfolio Highlights:

Technology Innovators: The satellite space has done pretty well in Brian’s other portfolios, but this one didn’t have much exposure. Until now! On Thursday, he added Viasat (VSAT), a Zacks Rank #2 (Buy) designer, developer, and marketer of advanced digital satellite telecommunications and other wireless networking and signal processing equipment. With the market stabilizing a bit, the editor wanted to get into this name before it takes off. Read a lot more about the addition of VSAT in the complete commentary.

Stocks Under $10: When Brian added Gaia (GAIA) one week ago today, he figured that a streamer with fitness and yoga options would go over well in a country that’s pretty much confined to their homes. And he was right! This stock was easily the best performer of the day among all ZU names by soaring 14.9%. By the way, this portfolio also sold Frontline (FRO, +5.3%) and Opera Limited Sponsor ADR (OPRA) today.

Commodity Innovators: "Finally, some life in the energy markets as crude oil spiked up over 20%. President Trump gets the credit, after working both the Russians and Saudis to come to some compromise. There are no details yet on what may become of a deal, but this price action is promising.

"The news helps both commodities and stocks. Equities markets were up over 2% on the day, while most commodities were in the green. Demand destruction continues, but the supply side of the market is adjusting. Hopefully this helps the worst commodity market since the Great Depression.

"When it comes to oil, if a deal gets done, we could see over $30. If not, back under $20 we will go. This deal could move all commodities, so let’s be hopeful something gets done.

"The tide could be turning in commodities, but I want to remain patient and get some clarity on oil. Looking for some stocks to add after the weekend if the market atmosphere stabilizes." -- Jeremy Mullin

Have a Good Evening,
Jim Giaquinto

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