The DOW Had Its Worst Week Since 2008; Where To Find Cash-Rich Stocks In The Selloff; BioTechs Scrambling To Find A Coronavirus Cure
The title above comes from Andrew Bary’s feature article in this weekend’s (Feb. 29/Mar. 1) Barron’s. After seeing $3.6T in losses by corporate America and stockholders, there are bargains galore. As Mr. Bary notes, “the Black Swanv event that Wall Streert has long feared materialized with the coronavirus epidemic; rattling equity markets and badly shaking investor confidence after an 11 year bull market.” For Mr. Bary’s full article, I refer you to this weekend’s Barron’s.
“The scale and speed of the selloff was stunning,” Mr. Bary notes. “The DOW plunged 3,583 points or 12 percent last week, capped by a 357 point drop on Friday. It was the steepest weekly decline since the 2008 financial crisis. The DOW now stands 14 percent below its all-time high of 29,551 on February 21. The S&P 500 index has declined 13 percent to 2,954 from its Feburary 19 peak of 3,386, and the NASDAQ is down 13 percent to 8,567,” Mr. Bary wrote.
“Investors seeking a safe haven, might want to consider Berkshire (BRK.A), and technology leaders like Alphabet/Google (GOOGL), Microsoft (MSFT), and Apple (AAPL), that have cash-rich balance sheets and durable businesses,” Mr. Bary wrote.
“In industry after industry, it may pay to stick with the strongest companies, including defensive Verizon Communications (VZ) in telecom, JP Morgan Chase (JPM), and Bank of America (BAC) in banking, Comcast (CMCSA) in cable television, and Chevron (CVX), and ConocoPhillips (COP) in the hard-hit energy sector,” Mr. Bary wrote.
Biotechs Scrambling To Find A Coronavirus Cure
The title above comes from Allison Gatlin’s feature article in this weekend’s/March 2 Investor’s Business Daily. She notes that Moderna (MRNA) scientists took just 42 days to manufacture and send the first batch of a coronavirus vaccine to the National Institute of Allergy and Infectious Diseases on February 24,” a “remarkable turnaround,” according to one industry analyst. “Meanwhile, biotech Gilead Sciences (GILD), is already testing an experimental Ebola virus vaccine in two groups of coronavirus patients in China. And the FDA just allowed Gilead to test remdesivir in two Phase 3 studies, beginning in March.” Other coronavirus vaccine hunters/players include: Inovio Pharmaceuticals (INO,) Novovax (NVAX), Vaxart (VXRT), and Altimmune (ALT), Regeneron Pharmecuticals (RGEN), Vir Biotechnology (VIR), AbbVie (ABBV), and several Israel-based pharmaceuticals.
So, lots to chew on here. I thought how the market closed yesterday/Friday was very encouraging, considering the DOW was down over 1,000 points during the day and closed under 400 points. Speculation that the U.S. Federal Reserve may cut interest rates by .25 basis points tomorrow afternoon (Sunday), prior to the opening of Asian and U.S. markets, likely played a role in Friday’s comeback. As with any stock investment, make sure to do your own due diligence, and understand your risk tolerance and time horizon. Good luck. RCP, fortunascorner