(San Francisco)

Apple has been deeply wounded by the coronavirus panic. The stock fell as much as 16.5% through the weekend before good gains on Monday. The reality is that this is great time to buy Apple, as shares are offering a big discount just before the next iPhone super cycle begins. According to Wedbush, a leading Apple analyst (and referencing the coronavirus sell-off), “we believe this will be short lived as the longer term 5G super cycle thesis and services re-rating remain the crux of our bull thesis on Apple for the next 12 to 18 months.” Wedbush believes that some 350m of the nearly one billion iPhones out there are “in a window of an upgrade opportunity”.

FINSUM: Apple has a good shot at selling over 200m iPhones in the 12 months starting September 2020, likely breaking its highest sales ever. This is a good time to get ahead of that.

(New York)

Variable annuities can be a fantastic product for long-term income security. However, they are complex products and buyers need to make sure they understand what they are buying. In particular, here are a few key points to remember when purchasing. Firstly, providers often have unique policies for how benefits are paid out once one spouse dies, so make sure these are understood to avoid accidentally disinheriting someone. Secondly, make sure clients understand the differences between the different value measurements of a variable annuity, such as cash-out value, death benefit, or “annuitized” value, as these can potentially cause some shocks. Finally, be careful when exchanging an older annuity for a new one, as older versions can be significantly more generous and are worth holding onto.

FINSUM: Variable annuities can be great long-term income streams, but it is integral to understand exactly what one is buying.

(New York)

How about some stocks with good income that should stand up well to the coronavirus scare? Sounds good. Well, take a look at the most obvious sector for such: healthcare. Healthcare stocks have great dividend yields right now and should be impervious to coronavirus by definition. Plus, they have a tailwind that only really arrived yesterday—a resurgent Joe Biden, who does not want to tear up the status quo of US healthcare. A couple good funds for this are the SPDR XLV or HGHAX.

FINSUM: This seems like a very good call—good income and a natural defensiveness to the virus scare. Plus, Biden’s resurgence should be positive.

(New York)

Storied research firm Bernstein Research has a recommendation for you, and it is a brave one—buy stocks. The firm says that on a tactical buying basis, it is time for investors to re-enter the market. Bernstein acknowledges that they have no idea when the coronavirus situation will clear up, but that given the general decline in indexes and that fact that sentiment has swung negative, it only makes sense to buy because the market has become too bearish.

FINSUM: We have to give Bernstein credit here for a bold call. Most analyst teams tend to hide or vacillate, but this is a strong call.

(New York)

The market is currently in a rough patch. Even with yesterday’s big rally, the near-term prognosis for stocks could be quite bearish. That said, one product that would clearly benefit from a bear market is fixed index annuities. Because they are designed for principal protection (with limited upside), they tend to do very well during down markets, with clients showing ample demand. They are also not overly vulnerable to the Fed cutting rates, so taken altogether, they may be a perfect product for this market.

FINSUM: It seems like a good time for fixed index annuities, and we suspect clients will be showing good demand for the product given widespread anxiety.

(New York)

Charles Schwab has some advice for investors: don’t buy stocks. This is a sharp contrast to Bernstein Research (see our other story today). Schwab says the market just doesn’t have enough upside momentum yet to warrant buying the dip. The custodian says that once you get two solid up days in a row, then it is time to buy. Schwab argues that two good consecutive up days signals a shift in momentum that warrants buying, and given how down the market has been, there will still be plenty of margin to the upside.

FINSUM: We like Schwab’s call better than Bernstein’s, and given today’s performance, it also appears much more accurate.

(New York)

Markets are on a brutal run. At their peak, they were off 15% last week, and the worst news is that it is likely not over. According to Citigroup, the market is still positioned to fall considerably. Despite the big losses, futures are positioned as a net long, which means there is plenty of room for the market to fall. “There is not capitulation yet, not at all”, says Citigroup. According to the bank’s quantitative analysis team, stocks would have to fall 23% for the long bets to be cleared out. “The futures market has got less long [or positive on] equities but it’s still not short and that’s the problem”.

FINSUM: This makes pretty good sense. Markets were very overbought before the fall, and with Bernie in the lead, there is little to calm investors right now.

(Boston)

Variable annuities have been going through a difficult period recently. Fixed and fixed index annuities have been grabbing market share in the year since the DOL rule got canceled. However variable annuities just escaped an important new regulation. Massachusetts just implemented the first state fiduciary rule—which may become a template for liberal states all over the country. However, variable annuities have officially been categorized as insurance products, not securities, so do not fall under the purview of the best interest rule.

FINSUM: This is a major development for the variable annuities industry because there were a lot of fears the rule would consider them securities. It seems like the Massachusetts rule will become the standard template for state adoption all over the US, so this is a big victory.

(Washington)

The OECD sounded a big alarm this week about the threat of coronavirus to the economy. The group of rich countries announced that coronavirus may have a devastating effect on the economy, cutting growth in half. The organization said that growth this year could shrink to 1.5% from its previous forecast of 2.9% growth. It said the outbreak and actions taken in China would cut global growth by 0.5 percentage points alone, not even factoring in the rest of the world’s outbreak and response.

FINSUM: So long as the virus keeps spreading and negative headlines keep coming, more and more economy-shrinking actions will follow. Markets will react in kind.

(New York)

Stocks are in a very dark place right now. At the bottom last week, indexes had seen a 15% fall. What comes next is the big question. Have we seen bottom, or are we settling in for a long period of weakness? Analysts from BNY Mellon say you should not buy stocks until you see a certain signal. That signal is clarity on when the virus threat might be abating. “If you think it is essentially a short-term problem, a hit to growth, but then it is over by the summer, then you’re fine going into the market. But if you think it is worse than that, then you have to play that out”.

FINSUM: Here is our view—coronavirus is unlike the other threats indexes have seen since the Crisis. This is not something that can go away instantly (like rate fears), and not something in the Fed’s control. It is an ongoing threat that creates uncertainty. Because of this, worries could linger and stock prices could stay lower for some time.