The first session of March 2021 provided us with a fresh start after the second-half of February was ruined by fears of rapidly rising rates. The major indices all surged on Monday by 2% or more amid steadier bond yields and a new covid vaccine.
The beleaguered NASDAQ easily led the way with a surge of 3.01% (or nearly 400 points) to 13,588.83, which was the tech-heavy index’s best performance of the year so far. The upswing recovered more than half of last week’s 5.2% plunge.
As you might expect, it was an especially strong day for the FAANGs. Apple (NASDAQ:AAPL) jumped nearly 5.4% and Facebook (NASDAQ:FB) advanced 2.8%, while Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) (GOOG) were each up about 2.2%.
The S&P also took advantage of the tech rebound and surged 2.38% to 3901.82, while the Dow managed to rise 1.95% (or more than 600 points) to 31,535.51.
Stocks are coming off a tough week that saw the indices decline by approximately 2% or more. However, February was still positive for them all, showing the reversal of fortune from an outstanding first half of the month to a more paranoid second half.
The 10-year Treasury yield remained below 1.5% for a second straight session. Investors got concerned last Thursday when it moved past 1.6%, but it seems to have steadied for now. This new calm facilitated today’s tech rebound.
Meanwhile, the FDA cleared Johnson & Johnson’s (JNJ) covid vaccine for emergency use authorization over the weekend. This single-dose treatment marks the third weapon against this pandemic, which could significantly increase the speed by which the country gets back to normal.
Also this weekend, the Biden Administration’s $1.9 trillion stimulus plan passed the House. This bill includes direct checks of $1400 to Americans and hundreds of billions of dollars in relief to state governments, among other measures. It now moves on to the Senate.
The big earnings news on Monday came after the bell from stay-home staple Zoom (ZM), which easily beat fourth-quarter expectations on both the top and bottom lines. Shares were up 9.7% in the session and have climbed over 8.5% after hours, as of this writing.
As this better-than-expected earnings season winds down, we’ll be getting some major retail reports the rest of this week. Perhaps the biggest comes tomorrow when Target (NYSE:TGT) goes to the plate before the bell.
Today's Portfolio Highlights:
Insider Trader: Get ready for a lot more action in this portfolio as the insiders are really making moves right now. For her first buy of March, Tracey picked up Trinseo (NYSE:TSE), a Zacks Rank #1 (Strong Buy) global materials company that’s into things like plastics, latex binders and synthetic rubber. Shares are up more than 200% in the past year, and yet a director bought 5,000 shares last week. It’s very bullish to see insiders add shares on an upswing, since it suggests they see even more improvement moving forward. Such optimism seems warranted for TSE, which is a global economic recovery play that expects to see “significant earnings improvement’ in 2021. The editor added TSE today with a 7.5% allocation after losing her patience with NVIDIA (NASDAQ:NVDA) and selling the innovative chipmaker for a 6.5% profit in about five months. Read the full write-up for a lot more on today’s action.
Blockchain Innovators: The two best performers among all ZU names in this sharply higher session came from this portfolio. The biggest winner on Monday was ZK International (ZKIN, +23.8%), while the runner up was Cleanspark (NASDAQ:CLSK, +18.9%).
Black Box Trader: The portfolio swapped out three positions in this week’s adjustment. The stocks that were short-covered on Monday include:
• Tronox (TROX, +8.6%)
• XPO Logistics (NYSE:XPO)
• Camping World (CWH)
The new buys that replaced these names were:
• Deutsche Bank (DE:DBKGn) (DB)
• Owens & Minor (OMI)
• Toll Brothers (NYSE:TOL)
Read the Black Box Trader’s Guide to learn more about this computer-driven service.
Counterstrike: “One of the reasons we saw the bullish sentiment was the Johnson & Johnson vaccine has finally gotten the go ahead. This one-shot vaccine is a difference maker as J&J has the ability to scale better than the others. This allows us to flood the streets with vaccine, which means everyone should be able to get a shot over the next few months.
“The other reason for the market optimism was the risk from last week doesn’t seem to be an issue thanks to the Reserve Bank of Australia. In what seemed to be a panic response to last week, the RBA doubled down on bond purchases last night. This set the tone for government bonds as it was a reminder that the central banks are in full control and simply won’t stop.
“Looking to add to the stocks above over the next couple days. Also, we should have some new positions. This market is impossible to short so we aren’t looking that direction any longer.” – Jeremy Mullin
All the Best,
Jim Giaquinto
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