First Week in April Provides More Coronavirus-Related Volatility

It's the start of a new month, and a new fiscal quarter

Digital Content Manager
Apr 3, 2020 at 4:05 PM
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While stocks enjoyed a strong start to the week, the roller coaster ride Wall Street has been on for the past couple weeks proved to be far from over. U.S. President Donald Trump went back on his plan to reopen businesses by Easter, pushing social distancing measures out until April 30, which cemented in investors minds that markets are in this for the long haul. Things pivoted quickly after Monday's spike, with the Dow, S&P and Nasdaq all clocking their worst months since the 2008 financial crisis, and the Dow notching its biggest first-quarter loss ever.

This landslide continued into April, after President Trump warned of a "very, very painful two weeks," though news on Thursday that Saudi Arabia would be curbing crude oil production helped prop stocks back up, at least for a little while. As of this writing, markets are, yet again, spiraling out of control, as dismal jobs data and a record spike in coronavirus-related deaths in New York paint a sobering picture of what might be next for the already wounded economy. 

Earnings Attempt to Slice Through COVID-19 Headlines 

Though the coronavirus was front and center, investors also turned their attention towards several earnings reports trickling in throughout the week. Alcoholic beverage producer Constellation (STZ) failed to make waves, despite an earnings beat today, while outperforming pet supply name Chewy (CHWY) also pulled back in spite of better-than-expected revenue for its fiscal fourth-quarter earlier in the week. 

Two other names struggling to gain traction after earnings were Walgreens Boots Alliance (WBA) and RH (RH). Calvin Klein parent PVH (PVH) appears to be the outlier here, getting a boost after the firm stepped into the earnings confessional on Thursday. 

The Best (And The Worst) Stocks to Own This Month, Historically

While it's impossible to say what might happen next for stocks during such volatile trading times, Schaeffer's Senior Quantitative Analyst Rocky White put together several studies showing the best and worst S&P 500 stocks for both April and the second-quarter during the past decade. Amazon (AMZN) settled at a top-three spot for April. Also making the list of best stocks this month is Celanese (CE), while the currently struggling beauty retailer Ulta (ULTA) tends to do well in the second quarter. On the other end of the spectrum are Michael Kors parent Capri (CPRI), which tends to struggle this month, and Kohl's (KSS), which has seen dismal returns in Q2 during the past 10 years. 

Looking Ahead to the First Full Week of April

This past week we speculated on when stocks could see a bottom, and delved into how hedging ratios can help gauge the current options market. We also did more digging into what this recent record-breaking volatility has to say about the current market 

Looking forward, the first full week of April will be a short one, with markets closed at the end of the week in observance of Good Friday. Economic data will be sprinkled throughout the week, as investors keep a close eye on the Job Opening and Labor Turnover Survey (JOLTS) and the Federal Open Market Committee's (FOMC) latest meeting minutes. As far as earnings, struggling Delta Air Lines (DAL) and Luckin Coffee (LK) will both limp into the earnings confessional on Wednesday.


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