The Dividend Cafe

The market was up 300+ points most of the day today, and just as the sell-off faded yesterday, the rally faded today, with the market closing up 133 points (though the S&P was up 34 bps more than the Dow). Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Chief Investment Officer David L. Bahnsen answers questions from investors on markets and the ongoing COVID-19 pandemic Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I learned a lot in the month of April as well, and I want to share it with you today.  I am either excited to tell you or sorry to tell you that this week's Dividend Cafe is the longest one I have ever written, but also the most important one I have ever written.  The length of it is just simply because of the sheer ambition of all I am trying to cover this week.  There are some investment opportunities that have been created out of these last two months that warrant the attention I have given them this week.  But there also are lessons learned and principles reinforced that I am excited to share. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

After the big move up the last two days, we closed the extraordinary month of April with a down-300 point day. Weekly jobless claims came in at 3.8 million, bringing the aggregate new unemployment claims since the COVID crisis began to ~30 million. Oil prices for the June contract were up ~$4 today (+25%), and are up ~$8 since Monday. April ends up being the biggest month up in the stock market since January 1987 (+11.1% for the Dow and +12.7% for the S&P). Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The Bahnsen Group Investment Committee is back together for the first time in weeks to discuss all matters of the market, Covid, and investing. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The futures were pointing down 80-100 points without a lot of activity last night, yet by the early morning were pointing to a +300 point move higher. The market opened up ~400, bounced around throughout the day, and closed today down a tad. But the big tech companies were down 2-4% all day. But on the other hand, some key REIT’s, materials companies, energy names, and industrials were all up today. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The futures opened yesterday down a pinch and reflected a down 80 or so opening for a couple hours.  By the time I went to bed U.S. futures were pointing up 100, and more interestingly, the Nikkei was up over 400 points (see why below).  I woke up to the futures pointing up 200 points at 3:30am, and the June delivery contract on WTI oil down 17% to just over $14/barrel.  (The disconnect between short term oil futures and equities is a sight to behold). The market opened up ~100 points, and throughout the day traded up about +250 (most of the day).  Oil was down ~20% most of the day even as, once again, most energy stocks were higher.  Financial stocks were the huge leadership names today.  The Dow ended up closing +360 points, just off the highs of the day. Links mentioned in this episode: CovidAndMarkets.com DividendCafe.com TheBahnsenGroup.com

Last week’s national video call brought to you podcast listeners in audio form - COVID, two market phases, and what to do from here. Watch the call and follow along with the slides here - https://youtu.be/pt-wO73Y8to Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

It has been a fascinating week in the markets, with oil tanking, but the energy sector way up; with the markets up and down every day; with some bond sectors rallying, and others selling off.  Some degree of non-correlation between asset classes seems to be sneaking back into play, and non-correlation is the hallmark of normalcy.  Now, we have a long, long way to go ...  but there were interesting green shoots this week in each But the various developments in the markets this week are not the full heart of Dividend Cafe this week.  The heart of this weekly commentary is how to think about portfolio balance right now, what diversification really means, and what government stimulus and Fed interventions do and do not mean for your portfolio. So shut down your Zoom, turn off your Netflix, and do your third walk of the dog for the day later.  And jump on in to the Dividend Cafe ... Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The week of April 6 was the biggest “up” week in markets on a percentage basis since 1974. Last week (with up and down volatility) was another solid up week, whereas some tempering of the prior week’s rally had been expected. Coming into this week, I certainly figured some tempering of the prior two weeks rally would not be surprising, and we dropped 500-600 points Monday and Tuesday. Wednesday’s 450 point increase cut into that, and now today the Dow ended up a tad, but had been up 300 points before seeing that fade. Futures were basically flat all night last night and stayed as such this morning from 3:15am until 5:30am when the weekly jobless claims number came. The number came in at 4.4 million, down from last week’s 5.5 million but in line with expectations, and futures went from down a bit to up 100. The market hit its high levels in the first couple hours of the day, and just slowly faded throughout the day. Energy and Alternative Asset Managers were the standouts today. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com