Don’t Go Hog Wild from One Big Rally

Tale of the Tape: 

Good evening everyone. Today, we hit the daily double. The market ripped higher and it appears that the number of new Covid deaths per day in New York may have peaked.

We are grateful on two fronts, while recognizing these are both delicate things. 

First, one big day, even this monster, does not mean the market is out of the woods. In fact, most big up days occur during bear markets (see below).

Second, while new deaths appear to be slowing, it is too soon to tell whether this trend will continue and whether it might generalize across the rest of the nation sooner than later.

Let us keep our fingers crossed.

The S&P 500 closed up 7%, the biggest up day since March 24th. Every sector closed higher by 3.9% or more. Tech closed up by almost 9% leading the way like a champ.

This was the highest close in over 3 weeks and we can happy dance in the kitchen for a bit if we want to. Here’s how the major indices finished the day:

S&P 5002,663+7.03%
Russell 20001,138+8.24%
Dow Jones22,679+7.73%

Jamie Dimon’s Annual Shareholder Letter

This morning, JP Morgan published Chairman and CEO Jamie Dimon’s Annual Letter to Shareholders. This is a critical read and a lead-in to next week’s earnings announcements from several large banks. $JPM reports before the market open on Tuesday, April 14.

Dimon writes that he expects a deep recession and that is being widely quoted across the media. We’re going with a different quote from the letter because it is more useful to us all as investors, leaders, and people. Dimon writes,

A corporation – essentially any institution – is a living, breathing organism made up of people, technology, institutional knowledge and relationships and is generally organized around mission and purpose. Entering into a crisis is not the time to figure out what you want to be. You must already be a well-functioning organization prepared to rapidly mobilize your resources, take your losses and survive another day for the good of all your stakeholders.

The full read is great and we highly recommend it. You can find it HERE.

Covid and Stocks

At a press conference today, New York Governor Andrew Cuomo stated, “the number of deaths over the past few days has been dropping for the first time. What is the significance of that? It is too early to tell.”

A similar message came out over the weekend and the media are attributing this news to today’s rocket ship rally.

You can watch Cuomo’s full news conference HERE.

Gold 8-Year Highs

Gold futures jumped 4% today hitting prices not seen since 2012. Beast.


Quibi is open for business. Off the bat, the app feels great but the content has yet to steal our attention.

But don’t take our word for it, here’s the 90-day free trial.

Saudis are Cruisin’

Today, news broke that Saudi Arabia’s Public Investment Fund grabbed an 8.2% stake in Carnival Corp. The Saudis bought 43.5M shares for a total of $369.4M, making the average purchase price per share $8.49.

$CCL closed at $10.19, so the Saudis have already made ~$70M. lol.

Here’s the 3-month chart:

The Biggest Rallies Occur During Bear Markets

The chart below from Ned Davis Research shows days when stocks advance or decline more than 3%. Turns out that the majority of 3% up days occur during bear markets.  

Don’t get us wrong, big up days are nice, but don’t go hog wild from one big rally. Keep your head about you. Uptrends usually have far fewer +3% moves and less volatility.

Have fun, sure, but we’re not out of the woods just yet.

Links That Don’t Suck

Trade Setup: Opening Range Breakout via TradingExperts

Doomsday Prep for the Super-Rich via The New Yorker

Attention Allstate Customers: Shelter-in-Place Payback

Big Short’s Michael Burry joins Twitter with pleas to end COVID-19 lockdown

A PERFECT Allen Iverson Story via Barstool

Argentina to Default on Local Dollar Debt, Citing Virus Crisis

The Attention Diet via Mark Manson

Tiger tests positive for coronavirus at Bronx Zoo, first known case in the world

Mark Cuban on his entrepreneurial childhood via CNBC