The world is on full lockdown. Airlines have canceled flights, cruise ships are docking, and schools are closed.
Economies are at a standstill – yet one secret sector is set to outperform, which I identified using the techniques I teach in my free masterclass.
Keep reading to find out which major company’s chart has outperformed the market!
What’s the concern?
Overwhelmed healthcare systems.
It’s not the virus itself being so novel as its ability to compromise people all at once.
Imagine you rolled all of the annual flu infections and their complications into one week. That’s what Italy faces now, as ICU beds are in short supply.
This week’s jump focuses squarely on the Coronavirus, a pandemic that ends with a question mark.
We’ll start with the upcoming Federal Reserve meeting this Tuesday.
Market participants widely expect the Fed to cut rates this Wednesday at 2 p.m. The question is whether they drop it straight to zero now or over two meetings. A growing plurality believes it’s going to be the former.
Some Wall-Street titans like David Tepper don’t think that’s enough. They’re advocating for a quantitative easing program similar to the financial crisis. Yet, some worry that wouldn’t be well received by the markets as European equities cratered after a similar proposal by their central bank.
So far, they’ve been able to add…well infinite liquidity into the lending markets to avoid any catastrophic problems there. If they can’t fix the economy, they can help keep the financial system from falling apart.
After the market rally on Friday, chances are we’ll see a breather into the Fed. Once that passes, I fully expect the selling pressure to resume. It’s why I plan to use the tools I taught in my free masterclass to execute my trading plan.
National Lack of Response
President Trump faced the nation early in the week, proposing relief to Americans without declaring a state of emergency. Markets didn’t take that particularly well. The next day we saw limit down across the board, followed by another day of severe selling.
In total, the market entered bear territory faster than any time outside of Black Monday back in 1987.
Things seemed to turn around on Friday when word of the state of emergency declaration hit the airwaves. Markets managed to sizzle into the close, making their largest one-day dollar gain in history, erasing almost 90% of the previous day’s fallout.
Legislation is making its way through congress to ease the burden on Americans. Yet, we may see more targeted relief for Airlines, who are not just being hit hard, but also a crucial piece of the country’s infrastructure.
The Major Question – When?
When will kids return to school? When will travel bans be lifted, when will life return to normal?
I can’t say for sure, nor can most experts. The current goal is simply to spread out the run of the disease over an extended duration, prolonging the run on the hospitals.
Some believe that the disease may wane as we make our way into the summer months. Others see an annual recurrence as a real possibility. At this point, it’s nothing more than educated guesses.
Our next milestone rests in a delayed plan to get testing out to the American public. Once that happens, we’ll at least have some idea of the scope.
Make no mistake, without a clear end in sight, whether from a reduction in cases, or some other mitigating factors, any rally is simply a dead cat bounce. The swings will be sharp as we see trades unwind and margin calls galore.
All-in-all, we could be headed as low as a 50% retracement before this whole thing blows over.
That’s why it’s crucial to know which areas are less likely to get blown apart. It’s the very trades I show my Total Alpha members daily.
But I’ll share one key chart here with you.
As the public panics, grocery stores thrive. The run on supplies has caused product to fly off the shelves at an inordinate rate.
Kroger sits at the top of the food chain when it comes to shopping needs. They’re the largest grocery chain operator in the US. So, when folks panic buy, it sends KR shares pretty high.
To give you an idea of its strength, I’ve outlined when the first wave of selling hit.
KR Daily Chart
While the rest of the market is down substantially, Kroger is actually HIGHER than it was a month ago!
It doesn’t take a rocket scientist to find these trades, just simple ideas I offer for free in my Masterclass.
Expected earnings dates listed in (…)
Stocks I want to bet against…
TLT (none), ZM (Mar 4), COST (Mar 5)
Stocks I want to buy…
MJ (none), UNG (none), XLE (none), WDAY (May 26), TWLO (May 3), OLED (May 7), V (Apr 22), IRBT (Apr 28), DPZ (May 20), GOOGL (May 4), CVNA (May 13), CMG (Apr 22), NFLX (April 21), AMZN (Apr 23), UBER (Jun 4), GDX (none), ROKU (May 13), MTCH (May 5), TDOC (May 5), LK, WORK, ZS, AYX, RH
This Week’s Calendar
Monday, March 16th
- 8:30 AM EST – Empire Manufacturing March
- Major Earnings: Fuelcell Energy (FCEL), New Age Bev Corp (NBEV), Coupa Software Inc (COUP), HealthEquity Inc (HQY)
Tuesday, March 17th
- 7:45 AM EST – ICSC Weekly Retail Sales
- 8:30 AM EST – Retail Sales February
- 9:15 AM EST – Industrial Production & Capacity Utilization February
- 4:30 PM EST – API Weekly Inventory Data
- Major earnings: HD Supply Hldg Inc (HDS), The Michaels Companies Inc (MIK), FedEx Corp (FDX), MongoDB Inc (MDB), Smartsheet Inc (SMAR)
Wednesday, March 18th
- 7:00 AM EST – MBA Mortgage Applications Data
- 8:30 AM EST – Housing Starts & Building Permits February
- 10:30 AM EST – Weekly DOE Inventory Data
- 2:00 PM EST – Fed Interest Rate Announcement
- Major earnings: Guess? Inc (GES), IAA Inc (IAA), Five Below Inc (FIVE), Guess? Inc (GES), Tailored Brands Inc (TLRD), Williams-Sonoma (WSM)
Thursday, March 19th
- 8:30 AM EST – Weekly Jobless & Continuing Claims
- 8:30 AM EST – Philly Fed Business Outlook For March
- 10:30 AM EST – EIA Natural Gas Inventory Data
- Major earnings: Commercial Metals (CMC), Darden Restaurants Inc (DRI), Lennar Corp A (LEN), Children’s Place Inc (The) (PLCE), CrowdStrike Holdings Inc (CRWD), Cintas Corp (CTAS), Ollies Bargain Outlet Hldgs (OLLI), Viveve Medical Inc (VIVE)
Friday, March 20th
- 10:00 AM EST – Existing Home Sales
- 1:00 PM EST – Baker Hughes Rig Count
- Major earnings: Hibbett Sporting Goods (HIBB)