It’s never good for stocks to plunge in the first session of a New Year, but it’s at least understandable this time as we just completed an insane year that included a dramatic turnaround amid unprecedented circumstances.
The major indices moved higher upon the opening bell, but it didn’t last long. The S&P ended Monday with a decline of 1.48% to 3700.65, while the NASDAQ slipped 1.47% (or just about 190 points) to 12,698.45.
Perhaps the best example of today’s jitters was the Dow, which hit a record high in the morning (along with the S&P) before collapsing by over 700 points at its worst.
The index cut the losses significantly, but the Dow still fell by 1.25% (or around 380 points) to 30,223.89.
Stocks are coming back from a very impressive 2020, especially when considering all the challenges.
The S&P was up 16.3% and the Dow advanced 7.2%. Of course, the A-lister last year was the NASDAQ, which skyrocketed 43.6% as money flowed into tech and “stay-home” names through the majority of the year.
Unfortunately, there’ll be plenty of uncertainty in 2021 as well. The vaccines are here… but so is that new, more contagious coronavirus variant. And even before we heard of that strain, covid cases were on the rise.
In fact, just today the U.K. initiated a new national lockdown to combat the spread. Will that be happening here soon under a new administration?
And apart from the virus, this week alone includes a couple runoff elections in Georgia that will decide who rules the Senate, along with the Government Employment Situation report on Friday.
Last month’s jobs report was disappointing with the economy adding only 245K jobs in November, instead of the expected 450K. However, the unemployment rate did decline to 6.7% from 6.9%.
We’ve got one more day left of the “Santa Claus Rally”. So far, it’s been rather unimpressive. The Dow and S&P are up over the span, but by less than the 1.3% average historically.
Let’s see what happens tomorrow…
Today's Portfolio Highlights:
Zacks Top 10 Stocks: A New Year brings a brand new list of stocks to this portfolio! But first let’s talk about what a fantastic 2020 the service had despite all the crazy challenges in the market. All ten stocks sold today were positive, including triple-digit profits for Sea Limited (SE, +386.8%), DocuSign (NASDAQ:DOCU, +193.6%) and HubSpot (NYSE:HUBS, +138.8%). The other seven winners all gained by double-digits, led by GDS Holdings (NASDAQ:GDS, +75.8%) and SiteOne Landscape Supply (NYSE:SITE, +69.9%). Take a look at the complete report to discover all the changes to the portfolio, including the 10 new buys that will help you take advantage of the upcoming recovery.
Black Box Trader: More than half of the portfolio was changed in the first adjustment of 2021. The six stocks that were sold on Monday included:
• UBS Group (UBS, +1.9%)
• Allstate (NYSE:ALL)
• Valvoline (NYSE:VVV)
• Jabil (JBL)
• Syneos Health (NASDAQ:SYNH)
• Steel Dynamics (NASDAQ:STLD)
The new buys that replaced these names were:
• Ally Financial (NYSE:ALLY)
• Citigroup (NYSE:C)
• Cleveland-Cliffs (NYSE:CLF)
• ExxonMobil (NYSE:XOM)
• Fifth Third Bancorp (NASDAQ:FITB)
• Goldman Sachs (NYSE:GS)
Read the Black Box Trader’s Guide to learn more about this computer-driven service.
Surprise Trader: “A new year is upon us. Good riddance 2020 you dirty birdie. Hello 2021, the start of the new normal, or the restart of normal? Only time will tell. For now, more of the same with markets up near all-time highs. Not the start that we wanted to see as the broad market averages were all under pressure.
“This week is when it all kicks off again. Expect to see lots of activity out of Surprise Trader, with a new name coming each day this week. The end of the next week is the unofficial kickoff of the new earnings season. Hold onto your hats because it?s going to be a busy one, and a risky one for the market with the easy money having already been made. Now is when the stock-pickers really shine.
“The first move of the new season comes tomorrow afternoon.
“Not a great start to the new year. Earnings season is right around the corner. I expect to see a lot of political headlines this week with protests planned. I bet Wall Street keeps its eyes on the prize and keeps moving forward.” – Dave Bartosiak
All the Best,
Jim Giaquinto
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