At the start of trading yesterday, I would have been happy with a 1% move for major indices across the board. And yet, I was rooting out loud for the Dow Jones Industrial Average (DJIA) to hold onto its 400-point gain in the waning moments of the session. Although there were some slippages across the board, it was an impressive day for the broad market, especially when you consider that it happened with little help from The Five Horsemen of the modern era rally.

Market breadth was very impressive with 360% more advancing issues than declining on the New York Stock Exchange and the NASDAQ Composite. The combined-up volume of 7.17 billion shares was well above the 1.86 billion down volume.

And while it may have seemed simplistic twenty-five years ago, I learned about the power of new highs versus new lows trends. I point these out all the time, especially over the past two weeks, as the pendulum changes to more highs that allow for greater leadership and upside bias for the broad market.

The last time 67 or more shares closed at 52-week highs on the NASDAQ was March 3^rd (77), and the last time the NYSE had 31 or more new highs was March 5^th (35).

Market Breadth	NYSE	NASDAQ
Advancing	2,329	2,556
Declining	644	695
52 Week High	31	67
52 Week Low	9	12
Up Volume	4.35B	2.82B
Down Volume	965.75M	902.83M

Bang Without FAANG

Who needs Facebook, Amazon, Apple, Netflix, and Google? All these names opened higher yesterday, then stumbled into the close. Instead of fleeing for the sideline, investors circled and looked for value, and found it in Financials, Materials, and Industrials.

• FB: -1.35%
• AMZN: -1.42%
• AAPL: +0.07%
• NFLX: -0.85%
• GOOGL: -0.27

S&P 500 Index	+1.47%
Communication Services XLC	+0.82%
Consumer Discretionary XLY	+1.87%
Consumer Staples XLP	+0.29%
Energy XLE	+2.17%
Financials XLF	+3.40%
Health Care XLV	+1.29%
Industrials XLI	+2.49%
Materials XLB	+2.67%
Real Estate XLRE	+2.90%
Technology XLK	+0.86%
Utilities XLU	+1.05%

Retailers led the way yesterday, as key executives met with President Trump at the White House, and more companies announced intentions to reopen albeit under different rules.

Brick-and-mortar retailers were already under siege long before the coronavirus (COVID-19), and destructive capitalism was working its way through selecting winners and jettison the losers. COVID-19 will just pull the future closer for many names, and it will allow those that are going to survive with a chance to shine sooner rather than later.

We are looking at names with a greater footprint in the initial sixteen states that have begun the process of reopening. Of course, a great omnichannel program is critical, and curbside pickup is the new secret sauce.

Testing Ramps Up

The U.S. testing capacity is ramping up with the private sector, including the pharmacy chains and testing labs that are stepping up. CVS and Walgreens will offer the self-swab test that will be administered in parking lots and drive-through windows after an online appointment has been scheduled.  CVS sees 1,000 locations being able to accommodate customers with this free service.

Federal Reserve Municipal Aid

The Fed has changed the eligibility parameters for its $500 billion Municipal Liquidity Facility (MLF) program.

Municipal Liquidity Facility	Original	Updated
States Population	2,000,000+	500,000+
City Population	1,000,000+	250,000+
Length	24 months	36 months

The Federal Reserve may periodically update these FAQs. Therefore, please check out this website:

https://www.newyorkfed.org/markets/municipal-liquidity-facility/municipal-liquidity-facility-faq

Portfolio Approach

I took major gains in Scotts Miracle-Gro (SMG), which was initially against us big time in the model portfolio. We added a new retail name – for more information, contact your rep or research@wstreet.com.

Today’s Session

The markets are up big this morning as more states reopen or announce plans to do so.  Also, there has been quite a few earnings reports, with companies beating on the top and bottom lines.

Comments

thanks for your help Charles larry babcock on 4/29/2020 12:11:53 PM

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