“Stocks rose Tuesday, and each of the three major indices hit fresh intraday records, as traders looked to extend November’s sharp advance.
Both the S&P 500 and Nasdaq each also hit record closing highs after jumping by more than 1.1% each. The tech-heavy communication services and financials sectors led the day’s advances in the S&P 500.
Equities kicked off the final month of 2020 with momentum from a record November, during which each of the three major indices made fresh record highs, and the Dow posted its biggest monthly gain since January 1987 with an advance of nearly 11.9%. In the S&P 500, the energy, financials and industrials sectors led the index’s 10.8% rise, as traders rotated back into many of the names that had been beaten down the hardest earlier on during the pandemic.
Many analysts believe equities will continue to ride a wave of vaccine-related optimism into December, after Pfizer (PFE), Moderna (MRNA) and AstraZeneca (AZN) each reported promising efficacy data for their respective COVID-19 vaccine candidates. Developments in the race to create an inoculation against the coronavirus helped stocks shake off volatility from earlier on in the month.”
Remember this speech and quote “Greed is good” from the Wall Street Movie? Stock trading is about greed and how you handle it. Take for example HTZ stock and CHK stocks, both are tumbling today, yet they surged during the previous stock market trading sessions. Traders that caught their recent stock price appreciation could have made money. Making money in stocks is not that easy, with the risk involved. Nothing wrong with making money with a speculative bet. As long as you can handle the risk of investing in stocks that move based on rumors and their fundamentals argue that there are important reasons to stay away from. Both stocks to buy, stocks to sell are risky. Risk management and money management, due diligence and financial analysis are very important for investing concepts. The stock market always has the element of greed in it.
ZoomInfo Technologies Inc. (ZI) stock surged on its first public trading day closing at 34.00,+13.00 (+61.90%).
“ZoomInfo Technologies (ZI) late Wednesday priced an initial offering of 44.5 million class A common shares at $21, giving the company a valuation of about $8.2 billion”, source: https://www.barrons.com/articles/zoominfo-prices-ipo-at-21-a-share-above-expected-range-51591282808?siteid=yhoof2&yptr=yahoo
This is the technical analysis for the S&P 500 index today, June 4, 2020. The technical indicators, moving averages, and pivot points that act as support and resistance levels. Before investing or start trading in S&P 500 futures in the stock market make due diligence preparation and analysis.
Volatility in stocks presents both risk and opportunity. Extreme volatility makes stocks riskiest, but volatile stocks can present trading opportunities for those traders or investors who love risk. These are the most volatile stocks for May 29, 2020. A new month is starting today for the stock market, and further due diligence is suggested before investing in stocks. All stock prices, stock quotes are at the close on May 29, 2020.
Minerva Neurosciences, Inc. (NERV): 3.7100-9.7600 (-72.46%)
AgeX Therapeutics, Inc. (AGE): 1.1300+0.3750 (+49.67%)
Sonoma Pharmaceuticals, Inc. (SNOA): 9.70+4.29 (+79.30%)
Hertz Global Holdings, Inc. (HTZ) stock today rallies more than 100% as of 10:38 AM, Wednesday, May 27, 2020, Eastern Time (ET). The stock price is at 1.2924+0.7374 (+132.8649%). However there is very important news related to the fundamentals of the stock, the company has recently filed for bankruptcy and most probably will very soon get delisted. Stocks like this get a lot of volatility mostly for speculation. Not for investing under these market conditions.
“The New York Stock Exchange initiated proceedings to delist Hertz Global Holdings Inc (NYSE: HTZ) on Tuesday following the car rental chain’s bankruptcy filing, according to Reuters.
Coronavirus Fuels Hertz Bankruptcy Filing
Economic damage from the coronavirus forced Hertz to file for Chapter 11 bankruptcy Friday after nearly a month of speculation. Between Feb. 20 and May 26, as the pandemic stalled airport business, Hertz’s stock fell from $20.29 to $2.84.”
What is an economic recession and how it may have an effect on the stock market?
“In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale natural or anthropogenic disaster (e.g. a pandemic). In the United States, it is defined as “a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales”. In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters.
Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply or increasing government spending and decreasing taxation.”
A decline of the economic activity is bad news for the stock market and the general economy
We like the definition that an economic recession “is defined as a negative economic growth for two consecutive quarters.” mentioned above. For the US economy, we had the first quarter of negative economic growth, and most probably the second quarter of 2020 will be even worse in terms of negative economic growth. The weekly jobless claims still show that many people file for unemployment insurance benefits. And many companies warn about their future profitability or avoid to make any forecasts at all. It will be a tough year to choose stocks to buy and stocks to sell. Why? Fundamentals should never be ignored about stocks and their valuation. And still, any selloffs may lead to short-term rallies as bargain hunters search for cheap stocks. Cheap stocks mostly related to their stock price, not their intrinsic valuation.
Stocks to avoid
Which stocks to avoid in an imminent economic recession? A few criteria to focus on for stock selection, investing and trading are:
Large amount of debt, weak balance sheets, poor profitability, negative or declining free cash flows are all signs of weakness.
Declining revenue growth, EPS growth same as above
Stocks with an abnormal price increase without any catalyst to suppot the rally are prone to correction
Stocks with a very high P/E or even worse a negative P/E are dangerous stocks
Defensive stocks, such as Utilities, Consumer Staples, Healthcare, are considered safer stocks during an economic recession.
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