U.S. stock indices ended a super volatile week on a minor note, declining for the sixth week in a row for the Dow Jones, the fifth for the S&P 500 and the Nasdaq, which lost another 1.4%. That’s already down 25% from the highs of November of last year. The quite good April data from the U.S. Department of Labor, which showed an increase in nonfarm payrolls, did not help either.
Nasdaq on the verge of collapse
The technology sector continues to bear the main losses. Netflix (NFLX) -3.9% and Amazon (AMZN) -1.4% were among the leaders of the decline among large-cap companies, which continued to renew local lows.
The Dow Jones is down for the sixth straight week. Which stocks to buy? Photo: CNBC
Reed Hastings’ stock has lost more than 70% of its value over the past six months. Back in November, Netflix securities were as high as $700, and in trading Friday, May 6, tried to test the $180 level. The pandemic gave a huge boost to the streaming giant’s subscription base, but the rollback of social restrictions also “returned the favor.
At current levels, though, we can state that Netflix has fundamentally transformed. The P/E has fallen to an adequate 18, and this may already be of interest to long-term investors. Amazon stock is begging for a $2000 test after all, and the P/E at 56 agrees with that.
Chevron bests the Dow Jones
Amid the relative stability in the oil market, energy sector stocks have been a bright spot amid the tech stock frenzy. With WTI prices at $110 a barrel, and Brent at $113, oil and gas stocks were in demand.
Industry giant Chevron (CVX) +2.66% led solidly in the Dow, while a pool of small- and mid-sized sector names topped the S&P 500.
The broad market index was led by NRG Energy (NRG) +9.78%. And EOG Resources (EOG) +7.13% and Hess (HES) +7% while renewing their highs. Occidental Petroleum (OXY) looks promising +4.25%.
Which stocks to buy?
Nobody cancelled the Sell in May, but the option of market capital rotation in the current situation is still valid, and there is every reason to assume that it will continue in the short term at least. And if you don’t believe in the market falling into the abyss that many are starting to talk about, then oil and gas stocks are the best thing in the market right now.
High oil prices will support oil stocks anyway. Before that, though, I highly recommend paying attention to the insider sales of the directors of these corporations.