After 30% Rebound, Will Stocks Hold Gains?

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After 30% Rebound, Will Stocks Hold Gains?

Earnings season is in full force and we saw some really awesome reports from our favorite stocks that are widely held by my wealth management clients.

Facebook (FB) jumped 9% on Thursday after reporting results that beat expectations.

Alphabet (GOOG) was up 10% after reporting a great quarter of its own.

Amazon (AMZN) fell on Friday but shares are still up 19% in the last month.

Netflix (NFLX) is up 16% in the last three months while the overall market is down.

Owning these stocks has been great for shareholders and helped them mitigate losses in the broader stock market – where some stocks are still down more than 50% from the 52-week.

The strong earnings have driven global stocks higher.

The S&P 500 (SPY) is now up 30% from the recent low – but still trading 17% below the 52-week high. Take a look below.

With a solid rebound in hand, now the key question becomes: what next?

Investors want to know if these gains are going to hold, or will stocks re test the low?

Here’s my take.

In the short run I do expect to see some short-term weakness because traders and shorter-term investors will be looking to lock in some quick profits and re position.

But I do not expect stocks to make a new low in the next few weeks and months.

I think stocks have made a strong bottom.

  • I think the global tide has shifted against covid-19.
  • I think the US economy will see a strong snap back in the second half of 2020.

My plan for deploying cash into the stock market is simple.

I am looking to deploy cash on any weakness. Buying dips. Buying weakness.

I think there is a very good chance that stocks are going to be back to the all-time high by the end of the year.

In the long run I think this will turn out to be a great place to invest.

I will be back in a few days with another update. Have a great week!

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