During the Great Recession, investors were introduced to the notion of “green shoots,” which were slight signs of economic growth. Under normal circumstances, such signs would be too early to matter. However, in the aftermath of the disaster, they were signs of hope.

These “green shoots” also served another purpose. They allowed us to shake off despair and the comfort of mediocrity. Severe economic damage can shift societies and markets into a place of doubt and live there until we are reminded that we can do more.

Yesterday was such a session for investors based on hopes in the fight against the coronavirus.

The Dow Jones Industrial Average (DJIA) rallied 1,627 points or 7.73% for its third-best point gain and the ninth-best percentage gain in history – that’s a “green shoot” of hope. 

Resurrection

Remember when President Trump wanted to open the U.S. economy by Easter?  Well, we aren’t there yet as a nation. On that note, the nation of Austria is looking to pivot from that Holy Day to bring their economy back online in a plan they are calling “Resurrection.”

Austria is 73.8% Catholic and 4.9% Protestant. Easter is a very powerful holiday for them, and this year will be a potential turning point. 

• April 14^th stores 4,300 square feet or smaller will be allowed to open.
• May 1^st all stores, including hairdressers and malls will be allowed to open for business.

Austria was quick to shut down its nation. It has seen 12,206 confirmed cases and 220 deaths, and daily infections have slowed to a 1.6% increase.

The caveat for this bold attempt is shoppers will be limited to one per 20 square meters, and everyone must wear masks (which must be provided by merchants free of charge).

The Stock of the Day & Chart of the Crisis

Boeing (BA) shares got out of the gate slowly, even as the broad market screamed higher out of the gate.  The company is shutting down its 787 operations in South Carolina and will extend the suspension of work in Washington state. A lot of stocks are up on this kind of news, which seems heartless. Wall Street is rewarding companies that are saving money by any means, including the suspension of dividend payments.

The chart of this crisis has been the cup & handle formation – for Boeing closing above $180 would be a huge buy signal.

Boeing (BA)

Market Breadth

This was the best Market Breadth we have seen in a while, as buying was spread throughout, resulting in far fewer names closing at 52-week lows. We have a long time to go before we are talking about a bunch of names making new highs – and that’s great news for those that want to buy low.

Portfolio Approach

We took huge profits on Uber (UBER), which held up well despite a lot of negative Wall Street ratings. I like the concept of Uber Eats and the growing relationships as part of a value proposition, but we were early in the model portfolio. 

The stock was in the Technology (XLK) sector, although it belongs in the Consumer Discretionary (XLY). We are raising Cash to a 2 weight or 10% and decreasing Technology to a 3 weight.

Today’s Session

There is intriguing action this morning, including a nice move in treasury yields, but also continued strength in gold.  High bond yields suggest improved feelings about the economy, but high gold reflects a continued flight to safety. 

• Ten Year 0.74
• Two Year 0.46
• Gold north of $1,700

Technical View

The Dow Jones Industrial Average could open above a very important resistance level of 23,185. This would be monumental and bring 25,000 back into the discussion. 

• 50-day 25,381
• 200-day 26,808

Dow Jones Industrial INdex, D, TVC

Samsung earnings showed great strength in cloud, gaming and other chips needed to facilitate the internet, which has seen meteoric demand growth during the global crisis.