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The biggest news of the day was the 20% pop for oil prices. They surged thanks to optimism around production cuts. There are also expectations from analysts that demand for the commodity will increase as some economies attempt to reopen around the world.
The S&P 500 was up as much as 1.8% mid-day, but it only closed 0.9% higher.
The overall market is clearly buying the news that economies around the world will open up.
But it's to be determined if they'll be able to do that without spreading the coronavirus further.
Here's what our experts – Chris Johnson, D.R. Barton, Jr., and Shah Gilani – think investors should be doing with their money today.
- Investors are betting that "we're back on track" as states begin to reopen businesses, but Chris thinks the market is about to approach a "Wall of Worry" soon because earnings reports and forward guidance along with government debt expansions are both negative signals.
- Even though oil was up in early morning trading, Chris thinks the decline in the commodity is not done yet.
- Demand will likely continue to be weak throughout the summer.
- Chris is bullish on one stock right now: Etsy Inc. (NASDAQ: ETSY).
- It's a great "defensive stay-at-home" stock that just completed a golden cross pattern where the 50-day moving average broke through the 200-day moving average to the upside.
- Look for the stock to jump about 25% to $90 per share.
D.R. Barton, Jr. (1:30 p.m. EDT)
- D.R. likes Activision Blizzard Inc. (NASDAQ: ATVI) because the number of people playing video games is surging during the quarantine.
- More than 50 million people are already playing Activision's new game, Call of Duty: Warzone – less than two months after its release on March 10.
- ATVI is currently trading for $68, but look to buy the stock for a trade or sell some puts around the $64 level.
- D.R. is closely watching Walt Disney Co.'s (NYSE: DIS) earnings report.
- It could get a pop if the news isn't as bad as consensus analyst expectations.
- D.R. advised investors not to buy options on the stock before earnings because the volatility premiums make them too expensive. Wait until after and ride the momentum one way or the other.
- Last, D.R. likes the used car dealers because they're likely to sell more vehicles than new car dealers during the economic crisis.
- Shah still expects the market to retest the lows made in March.
- In the meantime, he thinks investors would be wise to hold cash.
- Don't go "all in" on any positions yet.
- Instead, be patient and wait for the market to turn over before pressing shorts and buying puts.
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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