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Stock market commentary March 18 2020

US stock market is hard to invest in now with sustained increased volatility

At 4:53 AM, Wednesday, March 18, 2020, Eastern Time (ET) US stock market futures are down after yesterday’s stock market rally.

US stock market futures

S&P Futures: 2,393.50,-92.00(-3.70%)
Dow Futures: 20,145.00,-821.00(-3.92%)
Nasdaq Futures: 7,064.25,-328.00(-4.44%)

Stocks continue to be volatile

“Ongoing developments surrounding the coronavirus outbreak will remain in focus Wednesday. U.S. stocks rebounded Tuesday after the Trump Administration indicated that it is considering a fiscal stimulus package of more than $1 trillion.

Analysts warn that it will get worse before it gets better. “The turmoil in financial markets caused by the global spread of COVID-19 shows little sign of abating, despite policymakers’ efforts to contain the fallout,” Capital Economics wrote in a note Tuesday. “Our view remains that until evidence emerges that the spread of the virus is slowing down, risky assets are unlikely to rebound on a sustained basis.”

Source: https://finance.yahoo.com/news/coronavirus-general-mills-earnings-what-to-know-in-markets-wednesday-213728959.html

Being financial analysts our point of view on stock trading, stock investing is that with the sustained increased volatility it is very hard to invest now in stocks. Risk is too high and we must wait for the next quarterly reports and earnings releases, which should not be good. We favor defensive stocks and stocks with a good and attractive dividend yield. As long as the stock market is up more than 5% per day, and then falls almost the same or more the following day, it is too risky to invest in stocks. Choosing defensive sectors is the safest option for now. For most active traders, daily stock trading and stock investing may offer plenty of short-term trading opportunities with stocks to buy and stocks to sell. But a lack of a clear trend makes the US stock market a roller-coaster. And evidence of a bottom for stock prices and stock indices does not exist yet.

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