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Stocks had their best day since April as investors were optimistic that an effective coronavirus vaccine could soon be on the horizon.
U.S. Federal Reserve Chair Jerome Powell also made some long-term bullish predictions for the U.S. economy, saying the Fed will print as much money as it needs in attempts to solve any short-term problems.
The Dow closed up 3.8%. The S&P 500 gained 3.1%. And the Nasdaq was up 2.4%.
Here's why our experts - Chris Johnson, Tom Gentile, D.R. Barton, Jr., and Shah Gilani - aren't buying it...
- Chris covered the primary reasons markets were up in early market trading:
- Moderna Inc. (NASDAQ: MRNA) reported positive trial results on its new coronavirus vaccine. It showed all 45 human participants produced COVID-19 antibodies.
- Over the weekend, Jerome Powell said there's a lot more the central bank can do to support the economy, and it's not out of ammunition by any means. It can issue more checks, buy more bonds, and boost liquidity in many ways.
- Chris noted the increased exposure hedge funds are taking toward gold. And he thinks it's because the Fed has printed (and will be forced to print) so many dollars in such a short period of time.
- Chris has a $190 price target on the SPDR Gold Trust (NYSEARCA: GLD) by the end of 2020. It's currently trading for $163.
- Tom is still short-term bearish on this market and thinks investors would be wise to add protection on today's rally.
- That's because of the light volume stocks are trading off today and the Fibonacci retracement levels he's looking at on the S&P 500 show we're due for a pullback.
- Tom is still long-term bullish on Bitcoin.
- He sees the price breaking to new all-time highs at the end of this year or early 2021.
- According to Tom's Bitcoin crypto calendar, it typically goes higher in June. So, look for it to break through $10,000 per coin by then.
- He's also bullish on Ethereum and thinks it will ride higher off the coattails of Bitcoin.
- Two of Tom's favorite stocks to own today are Amazon.com Inc. (NASDAQ: AMZN) and Booking Holdings Inc. (NASDAQ: BKNG).
D.R. Barton, Jr. (1:30 p.m. EDT)
- The $315 May 29 Apple Inc. (NASDAQ: AAPL) calls D.R. recommended last Friday are already up about 75%. You could take some profits off the table.
- D.R. explained that recent winners like Zoom Video Communications Inc. (NASDAQ: ZM), Kroger Co. (NYSE: KR), and Docusign Inc. (NASDAQ: DOCU) are down today because investors are optimistic on a potential coronavirus vaccine.
- With the SPDR KBW Regional Banking exchange-traded fund (NYSEARCA: KRE) up 9% today, D.R. thinks investors could profit with a quick trade - buying puts on the ETF.
- D.R. likes AutoZone Inc. (NYSE: AZO) stock and thinks the used car trend is still in play.
- D.R. is also bullish on Bitcoin and thinks it has the highest probability of being the winner 20 years down the road because it's the first, biggest, and only truly decentralized cryptocurrency that can't be controlled by any government.
- Tomorrow, D.R. will be closely watching Walmart Inc.'s (NYSE: WMT) earnings report.
- D.R. fears traders will be selling the news because even analysts have such high expectations for the business.
- Shah isn't buying this rally and thinks the United States is clearly heading into a recession. And it could turn into a depression.
- Q1 earnings are expected to conservatively be 22% lower year over year.
- During the Great Recession in 2009, peak unemployment only hit 10%.
- Today, eight weeks into the coronavirus crisis, we're already at 20% unemployment.
- Shah thinks it's going to take a long time for jobs to come back and for consumers to feel comfortable going out and spending money.
- So, since corporate earnings are likely to suffer in the medium term, Shah thinks stocks are overvalued today.
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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