Barron\'s - April 6 2020

March 30 through April 3, 2020

Euro Trader P. M4

Emerging Markets P. M4

Striking Price P. M5

Commodities P. M6

Inside Scoop P. M7

13D Filings P. M7

Power Play P. M7

Charting the Market P. M8

Winners & Losers P. M9

Research Reports P. M10

Market View P. M11

Statistics P. M12

21,052.53

52-wk:-20.33%YTD:-26.23%Wkly:-2.70%

Dow Jones Industrials

2488.65

S&P 500

52-wk:-13.97%YTD:-22.97%Wkly:-2.08%

7373.08

Nasdaq Composite

52-wk:-7.12%YTD:-17.83%Wkly:-1.72%

28.34

Crude Oil WTI

52-wk:-55.07%YTD:-53.59%Wkly:+31.75%

40%

-10

-20

0

10

20

30

Monday Tuesday Wednesday Thursday Close

Source: Barron’s Statistics

Friday

MARKET PERFORMANCE DASHBOARD

Oil Rally

A 25% jump in the price of oil on Thursday

sent energy stocks sharply higher, lifting

broader indexes. The beleaguered sector

hasbeentheworstperformerin2020.

A Historic Quarter

TheDowfell1.8%onTuesdaytocloseout

history.Theindexlost23.2%ofitsvaluein

three months.

ASourStart

start on Wednesday. Walmart was the lone

Dowcomponentthatroseastheindexfell4.4%.

Out of Work

LaborDepartmentdataonFridayshowed

that U.S. employers shed 701,000 jobs in

March and that the unemployment rate jumped to

4.4%.TheDowfelltoclosetheweek.

THE TRADER

The Dow

Dropped

Last Week.

Why That’s

Good News.

T

he Dow Jones In-

dustrial Average

fell nearly 3% this

past week. We call

that progress.

The first wave of

the Covid-19 crisis

saw investors selling anything that

moves, with little regard for compa-

nies’ individual prospects. The threat

of the virus to people’s health and the

economy became very real, very fast—

and gaining some liquidity seemed to

be the overriding objective.

Then monetary and fiscal stimulus

and a dose of mean reversion swooped

in to at least pause the bleeding. Some

restored optimism boosted the Dow

21% in just three days two weeks ago.

Now, investors seem to be moving

on to the next stage of the coronavirus

market: picking winners and losers.

The correlation between stocks in the

S&P 500 index has retreated from its

recent near record-high levels, a sign

that investors may be considering them

more on their own merits. And day-to-

day index volatility has fallen signifi-

cantly since the Dow’s three-day surge.

Investors’ expectations for future

moves have also declined. The Cboe

Volatility Index, or VIX, tumbled 29%

this past week, to finish below 50 for

the first time since early March. That

is still an elevated level, no doubt—but

far from the string of closes in the 70s

and 80s seen in recent weeks.

Overall, the Dow fell 584.25 points,

or 2.7%, to 21,052.53 this past week—

its calmest week since the one ended

March 6. The S&P 500 dropped 2.1%,

to 2488.65, and the Nasdaq Composite

declined 1.7%, to 7373.08. All were

relatively small moves compared with

what investors have faced since mid-

February.

But individual sectors and shares

still saw plenty of action—and the dis-

persion between the best- and worst-

performers has been enormous. The

most coronavirus-sensitive stocks tum-

bled last week: Carnival (ticker: CCL)

fell 55.3%, American Airlines Group

(AAL) dropped 35.8%, and Live Na-

tion Entertainment (LYV) lost 26.1%.

Any business that relies on travel or

in-person contact saw its shares fall,

with even greater selling for those with

larger debt loads.

Yet buyers also swooped in. They

By Nicholas

Jasinski

MARKET WEEK