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The Dow Jones Industrial Average is off another 700 points Thursday as investors continue the roller coaster in the markets. Despite yesterday's 1,000-point gain, markets continue to monitor government reactions to the COVID-19 coronavirus and the rising number of cases on the West Coast.
The death toll in the United States has reached 11, and the number of confirmed cases has topped 160. This morning, Facebook Inc. (NASDAQ: FB) announced plans to shut one of its Seattle offices after a contractor tested positive for the coronavirus.
Before we dive into the latest trade developments and more, here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:
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Now, here's a closer look at what I'm following today. These are the most important market events and stocks to watch.
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The Top Stock Market Stories for Thursday
- The coronavirus is again driving headlines this morning. Johns Hopkins University reports that global cases topped 95,700, with deaths sitting at 3,280. South Africa reported its first case this morning. Meanwhile, the U.S. Congress is set to pass an emergency spending bill to help combat a coronavirus outbreak. In addition, the Department of Health and Human Services announced plans to buy at least 500 million N95 masks for healthcare workers over the next 18 months. The guaranteed orders will incentivize companies to increase production of the masks.
- The sell-off continues in the stock market as a whopping 66% of S&P 500 stocks remain in correction territory. About half of that total now trades in bear market territory, which means they are off more than 20% since their recent highs. Airline stocks continue to take a hit thanks to cancellations and news that the passenger airline industry could lose between $63 billion and $113 billion in 2020. Previous estimates from the International Air Transport Association put losses somewhere around $29.3 billion. Shares of Southwest Airlines Co. (NYSE: LUV) are sliding on news that the company anticipates a $300 million loss this quarter due to the outbreak.
- Oil prices were still falling Thursday despite news that OPEC has agreed to slash 1.5 million barrels of production per day. The world's largest oil cartel is meeting in Vienna, Austria, to discuss ways to address falling demand, particularly in Asia. OPEC is hoping that non-member Russia agrees to production cuts to help stabilize crude prices.
Money Morning Insight of the Day
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Stock to Watch Today: SIVB, CUBA, CMG, JBLU
Investors are looking for long-term opportunities to buy cheap stocks right now that have remarkable profit opportunities in the future. Rather than discuss tickers in the news this morning, I wanted to highlight several stocks that are very intriguing right now and should be on your radar. These are unique opportunities to buy half-stakes now and a second stake in the future.
- SVB Financial Group (NASDAQ: SIVB): Its subsidiary is Silicon Valley Bank, one of the premier lenders to technology companies across the nation's hub for startups and tech giants. Right now, the company trades at an EV/EBITDA under 3. The Wall Street consensus price target has the stock 50% higher from today's levels.
- Herzfeld Caribbean Basin Fund Inc. (NYSE: CUBA): It's sitting at a double-digit discount to its NAV. It pays a 5.4% dividend. While everyone is cheering the news that Royal Caribbean Cruises Ltd. (NYSE: RCL) is paying a dividend north of 4%, this closed-end fund pays more and is trading at a discount. Closed-end funds are the best buys in times of massive sell-offs.
- Chipotle Mexican Grill Inc. (NYSE: CMG): Hedge fund activist Bill Ackman still loves the stock, and shares are moving higher after it announced plans to start operating drive-thru windows. Without the coronavirus pressure, this stock would have easily cruised above $1,000 on that announcement.
- Jet Blue Airways Corp. (NASDAQ: JBLU): Airline stocks remain under pressure, but this stock's EV/EBITDA sits at 4.19, and it is trading under book value. It's going to keep falling, but this would be the first entry point back into the sector.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.