The Dividend Cafe

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.

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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.

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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

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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 ...

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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.

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The market rallied quite a bit today, coming off of the two ~600 point down days that started the week. Oil prices were up 22% (from their very low level, mind you) and they are at least now only showing the June contract vs. the delivery/storage fiasco in the May contract that was taking place Monday and Tuesday. Futures were pointing to a 250-point increase when I woke up this morning, and throughout the day markets traded roughly between +250 and +500. The +450 close was off of the high of the day that came ten minutes before the close.

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We cover the market, the latest in health data, plenty on housing prices, the PPP Part Two stimulus program, and oil prices - plus more

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The week went essentially much as I expected in the markets – the health data continues to point towards marked improvement, but not quite yet a full re-opening; markets did not continue the violent rally of last week, but had some modest volatility both up and down; and the economic data from March was awful, with all eyes and ears focused on where we go from here.

On the week, as of press time, the market is down a tiny bit on the week, but that comes with some decent sized up days and down days along the way (down 300, up 600, down 300, up 700).

• Is life about to change forever and ever?

So jump on in to the Dividend Cafe. I promise it will be a refreshing commentary on markets and the economy for investors who deserve better than the sensationalistic or self-serving garbage often posing as commentary.

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