Markets Live Recap: Why the Dow Fell for the First Time in 5 Trading Days

By Money Morning Staff Reports, Money Morning • April 28, 2020

Stocks started the day up about 1%, building on yesterday's positive momentum that 12 states were looking to reopen parts of their economies.

But as the latest earnings reports of the FAANG stocks came into focus, investors became nervous.

This afternoon, these market leaders started selling off ahead of their conference calls with analysts later this week.

That's what ultimately drove the market down mid-day and into the close.

Here's what our experts - Chris Johnson, Tom Gentile, D.R. Barton, Jr., and Shah Gilani - saw in the stock, bond, and gold markets today, April 28...

Chris Johnson (8:45 a.m. EDT)

• Chris explained that the rally in stocks yesterday came mostly from investors who were optimistic about the reopening of about 12 U.S. states.
• Chris noted that we're starting to see trading volumes increase as earnings season continues.
  • This suggest the market is gaining momentum and will likely break one way or the other in about a week or two.
• To pick winning stocks, identify companies that are breaking above the resistance created by their 50-day moving averages.
  • Since there aren't many of them, Chris thinks this recent rally is close to running its course. And we could soon retest the lows made last month.

Tom Gentile (11 a.m. EDT)

• Since the iShares Barclays 20+ Year Treasury Bond Index (NASDAQ: TLT) and the Invesco DB US Dollar Index Bullish Fund (NYSEARCA: UUP) were both up with the stock market this morning, Tom thinks that the rally in stocks is close to being overdone.
  • And he was right, as stocks went from being up about 1% in the early morning, only to turn over and trade flat mid-day.
• Tom is still bullish on gold and Bitcoin long term. They're both limited in supply as governments around the world continue to print fiat money backed by nothing.
• Tom thinks investors should sell a vertical spread on Alphabet Inc. (NASDAQ: GOOGL) options, and he gave investors one way to do that here.
• Tomorrow, Tom will cover Facebook Inc. (NASDAQ: FB) ahead of its earnings report on Thursday.

D.R. Barton, Jr. (1:30 p.m. EDT)

• D.R. is encouraged by the new data from Johns Hopkins that shows signs of the spread of coronavirus slowing in Italy.
  • But he still thinks it will be a long time before we get back to the economic levels we saw before the panic.
• Last week, D.R. was bearish on Netflix Inc. (NASDAQ: NFLX) ahead of its earnings report.
  • Since then, the stock is down 7.5%. And he thinks this negative momentum should continue in the short term.
• Be sure you tune in to D.R.'s live stream this Thursday at 1:30 p.m. EDT.
  • That's when D.R. will show you how to implement the best "follow through trades" on Amazon.com Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL).
  • These trades could make you money whether the stocks are up or down after reporting earnings.

Shah Gilani (3:45 p.m. EDT)

• Shah thinks we could be in the early stages of a depression.
  • But here's the difference this time... the Fed has learned a lot since the 1930s and is ahead of this one.
  • He predicts it's going to be ugly but short-lived because we won't see as many defaults due to the Fed coming to the rescue.
• Consumer confidence is at a 47-year low. The Conference Board said today that its confidence index fell from 118.8 to 86.9.
  • Shah is concerned about the consumers' ability to spend because he doesn't see jobs coming back nearly as quickly as we've lost them over the past two months. And that will be the No. 1 factor of whether we head into a depression or not.

Catch us tomorrow - starting LIVE again at 8:45 a.m. EDT with Chris Johnson, right here.

If you missed our live streams today, you can now replay them on our YouTube channel, here.

Got a question you want our experts to cover? Send us a note.

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