While investors ended Friday on a somewhat sour note, they saw explosive gains in the stock market today. The S&P 500 rallied 7.5% at one point, as investors bid up equities in a fit of optimism.
Where that optimism is coming from is still somewhat unknown. The apparent meeting that was to be held with OPEC and other producers on Monday was delayed over the weekend due to disagreements. While oil prices were hammered as a result, the commodity was bid up off the lows. The meeting is reportedly set for April 9.
What else? Despite the world adding tens of thousands of new confirmed cases of the novel coronavirus each day, investors are hopeful that we’re nearing a peak. Or at least, that seems to be the takeaway, with stocks rocketing higher on Monday following a Sunday evening address from the White House.
Heard on the Street
According to Morgan Stanley strategist Mike Wilson, the time to buy stocks is now. “The risk/reward is more attractive today than it’s been in years,” according to Wilson. He believes the bear market actually began two years ago and the current pandemic is the end to that.
JPMorgan (NYSE:JPM) CEO Jamie Dimon expects the pandemic to result in a “bad recession,” with financial stresses that could be similar to 2008. On the plus side, the banks came into this pandemic in a strong position. But as the economy struggles and as loan losses increase, JPMorgan will become further constrained.
While buybacks have been shelved by the banks, investors assumed the dividends were safe. Dimon reasoned that, if the downtown is severe enough, the stock’s dividend payment may need to be halted in order to preserve capital. While the banks endure annual stress tests from the Federal Reserve, this situation is playing out much differently, he added.
Separately JPMorgan analysts downgraded Starbucks (NASDAQ:SBUX) to “neutral” from “overweight” and assigned a Street-low price target of $55. The company has done a great job with the situation, the analysts say, but the shopping habits of U.S. consumers could take a long time to recover.
Tesla (NASDAQ:TSLA) shares climbed 7.6% in the stock market today. That’s after a Jefferies upgrade to “buy” from “hold” and a new $650 price target. Tesla has an edge over its peers in the electric vehicle space and should benefit from the newly released Model Y, they reasoned.
Baird analysts also had some positive comments on Tesla, saying it could “fare better than luxury peers.”
Nvidia (NASDAQ:NVDA) climbed aggressively on the day, up 10%. That’s as Bank of America analysts sport a “buy” rating, but a price target of just $240. However, they see positive trends for Nvidia, particularly in gaming. That’s giving a boost to sentiment on Monday.
Movers in the Stock Market Today
Finally some good news for cruise companies. The Public Investment Fund of Saudi Arabia just purchased an 8.2% stake in Carnival (NYSE:CCL), launching shares higher by 20.9% on the news. Royal Caribbean (NYSE:RCL) benefited from the announcement too, up 21.7%, while Norwegian (NYSE:NCLH) shares climbed 18.2%.
Wayfair (NASDAQ:W) is expecting to possibly exceed, or at least meet, its first-quarter guidance numbers. The company said its growth rate more than doubled at the end of March and has continued into April. Wayfair soared 41.3% today and it may mean good news for other online retailers, like Amazon (NASDAQ:AMZN), Etsy (NASDAQ:ETSY) and Chewy (NYSE:CHWY).
Immunomedics (NASDAQ:IMMU) shares are skyrocketing on news that the company has halted its Phase 3 study with its triple-negative breast cancer trial. While that seems like bad news at first glance, it’s due to compelling efficacy results. Shares about doubled in the session, up 99.8%.