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Stocks fell sharply today as investors continue to evaluate the United States' ability to reopen the economy.
The Dow, S&P 500, and Nasdaq all closed about 2% lower for the day as the volatility/fear index (VIX) spiked over 14%.
That's even on news that House Democrats unveiled their latest $3 trillion coronavirus relief bill...
Here's what our experts - Chris Johnson, D.R. Barton, Jr., and Shah Gilani - thought about the volatile move today, and which stocks investors should be focusing on to smooth out the bumps in their portfolios.
- Boeing Co.'s (NYSE: BA) CEO predicts a major U.S. airline will "most likely" fold by September.
- Instead of trying to forecast which airline it will be, Chris thinks investors should be closely watching Southwest Airlines Co. (NYSE: LUV) because it's well-capitalized and should be one of the last airlines to fail.
- If LUV announces any major problems, that's bad news for the rest of the industry.
- The Fed began buying corporate bond ETFs today, which essentially means the Fed is saying failure is not an option for these companies.
- Chris is slightly concerned about this because many of these companies were having problems paying back their debt before the COVID-19 crisis.
- Taxpayers may be on the hook for corporate debt defaults if these businesses aren't quickly able to generate revenue again once the economy reopens.
- Chris' favorite stock to watch today is 8x8 Inc. (NYSE: EGHT) - the company reports earnings tomorrow, and if it pulls back to $18, then Chris thinks investors should buy it.
- Don't buy ahead of earnings at $20, however, because the stock is too expensive at that level.
D.R. Barton, Jr. (1:30 p.m. EDT)
- D.R. is cautiously optimistic about the COVID curve flattening in the United States.
- The numbers are showing a drop in some of the highest-effected areas - New York and New Jersey - and if that trend is able to continue after the economy reopens, that will be a positive sign for stocks.
- D.R. is bearish on Uber Technologies Inc. (NYSE: UBER) and thinks investors would be wise to sell the news that it's looking to acquire GrubHub Inc. (NYSE: GRUB).
- Uber is up 5% on the day, but D.R. thinks it will be a long time before its core business will return to pre-COVID levels.
- Instead of buying an ETF full of cloud companies, D.R. thinks investors would be better off just owning Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT) because they're the biggest, best, and don't appear to be slowing down anytime soon.
- The last stock D.R. says he likes today is Micron Technology Inc. (NASDAQ: MU).
- He thinks investors could start nibbling at current levels around $46 per share and do well over the next year or two.
- Shah is concerned about the uptick in new COVID-19 cases in Wuhan, South Korea, and Spain.
- If that happens in the United States as more states reopen their economies, that would likely drag on stocks and could take us to new lows.
- Shah's also concerned about the comments from Dr. Fauci that we're not doing enough testing in the United States and that colleges may not open in the fall.
- Shah thinks investors should stay away from Virgin Galactic Holdings Inc. (NYSE: SPCE) even though the stock was down about 9% on the day after Sir Richard Branson announced plans to sell 12% of his SPCE stock in attempts to save his flailing Virgin empire.
- That's because space travel is one of the most nonessential businesses imaginable right now.
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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