4/23/2020 Market Outlook/Review

Looking at this week’s market moves so far, Energy (+7.59) & Materials (+3.66%) are the leading sectors, followed by Industrials (+1.92%) & IT (+1.65%).

Earnings results & oil price issues have caused some of this movement, but it is further reinforcing that people are looking for companies with lower debt, more cash and or better & safer dividends.

The Materials & IT Sectors offer this, as both have similar Debt/Equity Ratios, and where IT has high levels of cash, Materials are offering above average yields at safer Payout Ratios than most other sectors.

As I mentioned earlier in the week, I purchased shares of Advances Emissions Systems Inc. (ADES Ticker), a Micro-cap value play that filled on Tuesday at $6/share (+9% so far EOD).

Names like these should continue to thrive under these lockdown conditions, as folks will continue to seek stocks that are value-oriented, and that offer better interest in their yields than other assets are currently offering.

Financials (+.09%), Consumer Discretionary (+.32%) & Real Estate (+.7%) have all performed the worst so far this week. I don’t know that I’m ready to go deep diving into that end of the pool just yet, but will be certainly looking at those companies over the weekend.

Coming up on Friday, I’m not expecting much from tomorrow, unimpressive numbers across the board continue to show the fragility of the market, and today’s morning bump, afternoon pump was certainly reassuring on my short positions.

Seeing things like Tom Hanks typewriter message kids on CNBC after the market closes also doesn’t reassure me that we’re out of the woods just yet…

Expecting to see folks sell off risk into the weekend, especially given the number of companies set to report earnings tomorrow. Let’s see what happens!

*** I have a long position in $ADES, as well as Short positions against the S&P 500, NASDAQ & Russell, & also am Long Volatility, related to the above article***

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