COVID-19, the disease caused by SARS-CoV-2 (coronavirus), has spread across the globe, and as we enter May, several countries and U.S. states are testing ways to relax lockdowns and begin paving the way for economic recovery. While we don’t think U.S. states will follow federal guidelines for reopening, we expect the transition to be gradual and that they will quickly reverse any moves that lead to a spike in new cases. Diagnostic testing has improved more rapidly than we anticipated, to around 250,000 a day, and we think a combination of continued social distancing (masks and six-foot rule), steady improvement to 800,000 tests per day by the end of the year (which facilitates contact tracing and surveillance), broader availability of Gilead’s remdesivir, and potential targeted antibodies and vaccines by the end of the year in high-risk populations should allow visits to nonessential businesses like restaurants, salons, and retailers to recover to 30% below prepandemic levels by year-end, from a trough at around 65% below in March.
Demand for US jobs among Russell 3000 companies remained highly depressed during April, although certain industries such as Retail and Transportation pulled back on hiring faster. This is according to labor market intelligence firm Greenwich.HR, which tracks hiring and pay behaviors. Hiring volume continues to change significantly on a weekly basis as companies struggle to deal with the evolving implications of the COVID-19 pandemic.
Demand for US IT jobs has fallen precipitously since March 15, and the volume of job listings for IT workers has dropped 85 percent. This is according to labor market intelligence firm Greenwich.HR, which tracks daily hiring and job listing activity.
Faced with one of the greatest economic challenges ever, U.S. corporations -- both inside and outside of the Healthcare sector -- are reallocating resources in an all-hands battle against COVID-19. Here are some of the companies and what they are doing.
This is according to labor market intelligence firm Greenwich.HR, which tracks hiring and pay behaviors. ‘In the second half of March, the bottom fell out of hiring,’ Says Kevin Moldestad, COO of Greenwich.HR.
We can well imagine that “wow” has been uttered by more than just a few people of late - about the spread of the coronavirus, the impact of the virus on share prices and the global economy, and about the change in lifestyle that has taken place in a mere matter of weeks. But for those of us who follow insider-sentiment data from Vickers Stock Research, recent data has led us to a “double-wow”. Two weeks ago, we pointed out that corporate insiders reacted to stock price declines by increasing their purchases of shares in the companies at which they work.
The S&P 500 plunged 12% on Monday, it's worst one-day decline since the crash of October 19, 1987. From its all-time high on February 19, the index is down 29.5% in just 18 days, also the worst decline since 1987. The index closed at 2,386 and is rapidly approaching key chart support near 2,350 from the lows in December 2018. Interestingly, that area also represents a key Fibonacci retracement of 38.2% of the entire bull market since 2009.
The current equity market malaise almost led to a bear market following heavy selling pressure on Monday March 9, with the S&P 500 falling 19% from its recent peak. While volatility is likely to remain high as the range of economic and corporate profit outcomes continues to be considered, and as monetary and fiscal stimulus measures are likely announced, we believe many high-quality stocks have been oversold and represent opportunities for investors on the lookout for bargains. We screened for companies in our coverage universe that have the following criteria: Buy-rated, at least 20% below their 52-week high, a Financial Strength rating of High (indicating a strong balance sheet that can weather a downturn), and where we have at least have a market weight recommendation on the sector. The list of 26 high-quality stocks is below.
This is according to labor market intelligence firm Greenwich.HR, which tracks hiring and pay behaviors. This analysis is based on job listing data from all Russell 3000 companies.
Tuesdays are supposed to mark turnarounds in the market, moving in the opposite direction after a big move on Monday. Not this time! After cratering 112 points on Monday, the S&P 500 (SPY) fell another 98 points, with a two-day decline of 6.3%. That's the largest two-day loss since August 2015. The most recent two-day decline of over 6% was when the market was correcting after its parabolic move from late 2017/early 2018.
Looking at this from another technical angle (Elliott Wave), it’s likely that we are in Primary Wave 5 of this bull market (or the last major wave higher).
We are maintaining our BUY rating on Tesla Inc. (TSLA) and raising our target price to $808 from $556. In 2020, Tesla expects more than 500,000 vehicle deliveries, driven primarily by the ramp-up of Model 3 production in Shanghai.
Demand for US jobs among Russell 3000 companies remained strong during January, up 185% compared to January 2019. Job listing data typically precede actual hiring by 2-4 months. Also notable is the shift towards hiring higher-paying positions.
Amazon.com (AMZN) closed up 7% on Friday despite the broader market’s deep selloff, after announcing blow-out results for 4Q19. The company delivered 20%-plus sales growth and mid-single-digit GAAP profit growth despite higher fulfillment & shipping costs.
Average salaries of advertised jobs rose 3.1 percent nationwide in December, according to labor market intelligence firm Greenwich.HR. But, the outlook varies significantly across industry sectors and by job type. “We’re seeing a drop in expected pay levels for higher-paying roles, while advertised pay for other jobs is basically staying flat,” Said Cary Sparrow, Greenwich.HR CEO. “But, the real story seems to be the shift in hiring demand towards higher paying jobs, which is driving the overall average up.”
Texas Instruments shares dipped 1% in a down market after posting annual declines in revenue and EPS for 4Q19 but beating consensus expectations for both. The company cheered semiconductor investors when it characterized its end markets as “stabilizing,” while not expressing undue optimism about the outlook.
Capital One Financial (COF) shares jumped over 4% on January 22 following strong 4Q earnings of $2.49 per share, well above the $2.28 consensus. Average loans grew 8% in 4Q19, up from 4% in 3Q19. The net interest margin also expanded on a better lending mix.
Is it possible that market breadth is so good that it's bad? Absolutely! It's called being overbought from an internal standpoint -- and sometimes leads to a quick and dirty reset to the downside. But we also can rephrase this. "Is it possible that market breadth is so bad, that it's good?" Certainly! It's called a washout -- and usually is associated with an intermediate- to longer-term bottom. In a bull market, we'll take strong market-breadth statistics over not so strong any day. What's giving us pause is that the largest sector, Technology, is again leading in early 2020 and is about as extended internally as it can get.
American Tower (AMT) American Tower operates wireless and broadcast communications real estate, including wireless towers and distributed antenna systems.
Back in late October, we talked about some interesting inflection points for the U.S. Dollar Index (USD) and the iShares MSCI Emerging Markets ETF (EEM). While that call was early, we are starting to see some of the fruits of our labor. The greenback and emerging markets are joined at the hip in an inverse way, so an analysis of one is not complete without an analysis of the other. Since early 2018, USD has been in an uptrend, while EEM has been in a downtrend. The slope of the USD’s rising channel since August ‘18 has been shallow and is just breaking this uptrend near $97. At the same time, EEM has broken its downtrend since April and is making minor new recovery highs above that April peak. Simply, the USD is breaking down while EEM is breaking its eight-month downtrend. EEM completed an inverse head-and-shoulders and could see a measured move back toward its early ‘18 all-time-high of $49.53. Since May, EEM has stabilized versus the S&P 500, and is outperforming the index since late November. Because of the massive move EEM had coming out of the financial crisis, when the ETF almost tripled, performance since October 2010 has lagged the “500.”
The ULTA shares gained over 11% after reporting better-than-expected 3Q results. The cosmetics segment accounts for just over half the company's business, and despite recent weak industry trends, Ulta's market share has grown in the cosmetics category. While cosmetics growth may be muted in the near term, we see market share gains driven by new product launches in the skincare and hair categories, store expansion, and strong growth in the company's e-commerce business.