04May11:30 amEST

Reality Bites for These Stocks

One of the most diffident versions of Warren Buffett over the weekend we have seen in many years regarding the short and intermediate-term outlook for the economy and markets is likely pouring salt into the wounds of airline bulls who had bet that Buffett would at least retain some stakes in the companies with a positive word or two to boost their shares. Instead, Buffett sold them, and now we have AAL DAL LUV UAL down 7-10% across the board with Berkshire stock itself knifing lower. 

Reality also set in for Tyson Foods, down after 7% as I write this, as the stock is getting punished for not having a good enough plan to keep its workers safe(r) when it should have been one of the big winners from the cycle. Instead, TSN is stoking fears, rational or not, of a horrific scenario where food supplies become tighter than anything we have seen in this country in a long while. 

Meanwhile, the Nasdaq Composite is trying to offset these stark realities by doing some heavy lifting. Software stocks in the IGV are soundly green headed into the New York lunch hour, with "FANG" stocks like NFLX also threatening to pick up the slack of lagging parts of the market.

The net result is a mixed morning, something much quieter than we have become accustomed to of late. To my eye, the key piece of the puzzle today is likely to be found in the IWM, small cap ETF. Back below $122 (Friday's rough lows) would get some better downside momentum, while a push above $126 sees the tech buyers prevailing in the short-term to offset the "reality bites" stocks and sectors.

Weekend Overview and Analysi... Stock Market Recap 05/04/20 ...


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