Tesla organized a real rally for investors, American Airlines and Boeing too big to fail?

After a slow rise in January, the Covid-19 pandemic offset all profits in just a few weeks. He best illustrated it a real roller coaster for Tesla shares in the first quarter, which began with a short squeeze, resulting in a 50% increase in share prices, and after the closing of the Covid-19 epidemic, prices returned to the level of the beginning of the year.

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Tesla shares "hit of the season"

After a fantastic 2019, the market boomed in the first months of 2020, as a result of which the S&P 500 index fell by 24%.

- Last year, we kept asking ourselves: "Can this situation continue?" The first quarter proved to us that this is not possible, but no one expected the so-called A "black swan" in the form of a pandemic, resulting in a supply and demand shock of this magnitude - comments Peter Garnry, director of equity markets strategy at Saxo Bank.

Just a few months ago, nobody would believe in the possibility of introducing global isolation, but now that it has become a reality, it is important to know what to expect:

- Such huge uncertainty and global imbalance has not happened since 2008. As stock prices reflect future and growth prospects, they are most vulnerable to the current crisis. Over the past few months, investors have had a taste of what awaits us. More countries were introducing isolation, hospitals were increasingly burdened, and demand for some products and services fell sharply - says Peter Garnry.

Most popular shares, Q2020 XNUMX [GLOBAL]:

1. Tesla
2. Apple Lossless Audio CODEC (ALAC),
3. Microsoft Corp.
4. Danske Bank
5. Amazon

Peter Garnry, director of stock market strategy, discusses the five most popular shares among Saxo Bank customers in global terms.

Tesla

The first quarter was marked by this company, because Elon Musk gave investors a real roller coaster. Producing electric cars, Elona Muska initially soared up, after an incredible short squeeze, and then in just four weeks it peaked. Currently, the forecast depends on the recovery of production in China, which may cause Tesla to return to the game. However, Muska may plunge into recession.

Tesla Inc. shares, interval D1. Source: TradingView

Apple Lossless Audio CODEC (ALAC),

After record-breaking 2019, CEO Tim Cook needed to maintain momentum in the market of phones and wearable devices. However, like most companies in the world, other Asian countries which are closing due to the coronavirus have dealt a significant blow to the supply chain. This forced Apple to issue official information as early as mid-February that the company would not meet quarterly expectations. Given that coronavirus-related isolation is still ongoing, it is difficult to say whether this situation will continue in the second quarter.

Apple Inc. shares, interval D1. Source: TradingView

Microsoft

Last year, Microsoft's cloud-based technology saw an impressive 59% increase in revenues. This result can be further improved because the whole world is currently working from home. Instead of the current situation, in which Microsoft had to persuade companies to try their technology in the cloud, nowadays enterprises are forced to use these solutions on a daily basis.

Microsoft Corp. actions, interval D1. Source: TradingView

Danske Bank

After many years of instability caused by a major money laundering scandal, for the largest Danish bank 2020 was to be a year of consolidation. As in the case of other entities from the banking sector, Covid-19 has for now dispelled these hopes. Chris Vogelzang still has a lot of work ahead of him - one of the key tasks is to restore confidence on the bank-customers line.

Danske Bank shares, interval D1. Source: TradingView

Amazon

During the Covid-19 pandemic in the first quarter, Jeff Bezos 'store with everything' proved to be extremely shockproof. While other market players recorded double-digit declines, Amazon ended the first quarter of 2020 in the same state in which it started this year. During the crisis, the Seattle company even employed an additional 100 people to fulfill numerous orders placed by clients in quarantine from around the world.

Amazon Com shares. Inc., interval D1. Source: TradingView

Most popular shares, Q2020 XNUMX [POLAND]:

1. Tesla
2. Apple Lossless Audio CODEC (ALAC),
3. Amazon
4. Boeing co
5. American Airlines Group

Tomasz Szymula, an Saxo Bank analyst, comments on the most popular companies among Polish Saxo Bank clients:

“For the top three players, the demand does not seem to come as a surprise. Market leaders are doing well even under extreme conditions on stock exchanges. A glance at the charts shows a very convergent behavior of these stocks in recent weeks. A drop of about 30% from historical highs and catching up, and in the case of Amazon - breaking to historical highs. All three companies are part of the NASDAQ technology index, which gives you a clue where to look for investment opportunities in the current reality. "

The last two positions on the list are occupied by shares of companies related to the industry, which was put to the heaviest test when information about the virus spread through the mainstream media. It is hard to resist the impression that their popularity among customers is associated with a huge discount, which took place. In their case, the period from the turn of February and March and the next 4 weeks is a decrease of 70%, which in a situation of freezing air traffic is understandable. So why the optimism and willingness to buy shares of companies experiencing one of the most difficult periods in their history?

American Airlines Group

They experienced problems before the outbreak, the company has been in a downward trend since April 2018, analyzes show that it will take up to 2020 years for a return to the number of flights performed at the beginning of 5. Probably the rule "buy when it is cheap" works here, which, combined with the perception of American Airlines as too big to fail, creates a long-term view of profits. In addition, recent information about the mastery of the virus itself gives a breath of optimism, which is reflected in the reflection of the company's prices in the last few days. Currently, the key financial results will be published on April 24.

American Airlines Group Inc. shares, interval D1. Source: TradingView

Boeing co 

For this company, we can recall the grounding of the Boeing 737 Max, which also affected the above-mentioned American Airlines. Boeing started the downward trend in March 2019, negative financial results in the last quarter of 2019, combined with the crisis caused by Covid, are also not optimistic. On the other hand, government loan guarantees of USD 60 billion and the opinion of another "too big to fail" (the largest aircraft manufacturer in the world) give the idea of ​​purchase, with a long-term perspective, similar to American Airlines. The company will report financial results on April 29.

Boeing Co. shares, interval D1. Source: TradingView

"In conclusion, both companies - enjoying the possibility of support from the administration and being the largest in their industry - have great chances to survive today's crisis, and if so, in some time the world will return to traveling and their share prices will return to levels, where they were several months ago, hence the idea among customers to keep them in their wallets. "