Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Back at Record Highs Ahead of Big Tech Earnings Week

By Zacks Investment ResearchStock MarketsJul 23, 2021 09:15PM ET
www.investing.com/analysis/back-at-record-highs-ahead-of-big-tech-earnings-week-200593382
Back at Record Highs Ahead of Big Tech Earnings Week
By Zacks Investment Research   |  Jul 23, 2021 09:15PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The market left Monday’s sharp selloff in the dust this week, rising even more sharply in the following four sessions and finishing Friday with all of the major indices at record highs. Meanwhile, investors are preparing for a big round of earnings that includes the rest of the FAANGs and other major tech names.

What a horrible first impression for this week. In a flurry of concerns about increasing inflation and rising covid counts, the Dow had its worst single-day performance of the year so far by plunging approximately 725 points on Monday. The other indices dropped by more than 1% as well. And we had just snapped three consecutive weeks of gains.

But here we are on Friday at all-time highs after solid advances for the five days. Several of the editors talked about Monday’s plunge being a severe overreaction… and they were certainly proven right!

"This week shows exactly how news accelerates a move to the technical level that needed to be tested," said Jeremy Mullin in Counterstrike. "Once that 50-day printed, the buyers stepped in and didn’t stop. The move higher was helped by short sellers, that piled in on the negative headlines. It was a trap once again and the bears paid dearly."

The NASDAQ was the big outperformer as tech is preparing for a deluge of earnings reports from the big, market-leading names. With the season being very positive so far, investors are optimistic that some good numbers are on the way. As a result, the index climbed 1.04% (or about 152 points) today to 14,836.99. The weekly advance was an impressive 2.8%.

The S&P rose 1.01% on Friday to 4411.79, while the Dow advanced 0.68% (or around 238 points) to 35,061.55. These indices were up 2% and 1%, respectively, this week.

As stated earlier, that’s new closing highs for all, which is the first time for that since Monday, July 12. And stocks had some challenges to overcome this week as well, including a disappointing jobless claims result yesterday and a mixed report from Netflix (NASDAQ:NFLX).

Overall though, the season has been solid thus far and provided enough upward momentum to overcome all the concerns. According to our Director of Research Sheraz Mian, twenty-four percent of the S&P’s total membership have reported so far with 89.2% beating earnings and 85% topping revenue expectations.

But now things are going to get really interesting. The big tech players report next week, including Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) (GOOG) on Tuesday, Facebook (NASDAQ:FB) on Wednesday and Amazon (NASDAQ:AMZN) on Thursday. We’ll also be getting Tesla (NASDAQ:TSLA) on Monday, Microsoft (NASDAQ:MSFT) on Tuesday and hundreds of other reports.

Sheraz breaks it all down in his recent Earnings Preview article that’s aptly titled: “Big Tech Earnings Preview: Apple, Amazon and Other Market Movers”.

Today's Portfolio Highlights:

Surprise Trader: The car market is red hot right now, and so is Sonic Automotive (NYSE:SAH). This automotive retailer has beaten the Zacks Consensus Estimate for an impressive 15 straight quarters. And now this Zacks Rank #2 (Buy) has a positive Earnings ESP of 18.53% for the quarter coming before the bell on Thursday, July 29. SAH beat expectations by 30% last time and Dave thinks its set for another outperformance next week. The editor added SAH on Friday with a 12.5% allocation, while also selling Halliburton (NYSE:HAL) for a slight loss. Read the full write-up for more.

Counterstrike: When The Lovesac Company (NASDAQ:LOVE) talks about “alternative” furniture, they don’t just mean the style or pattern. They’re talking about sectional furniture that can be configured however the customer wants. Shares surged through May as its adaptable offerings really caught on. However, the stock has fallen 35% from highs and is close to some big support levels, which means Jeremy is now interested. He added a small 4% position in LOVE on Friday and will look to buy more on further declines. “We will navigate this position until the next big catalyst on September 8, which is earnings,” he said. The editor also likes the price action in Duck Creek Technologies (DCT), so he added 4% more and brought it to his max tier position. The service first added this name last week and it is now up approximately 5%. See the full write-up for more.

Blockchain Innovators: Today’s addition of GreenBox (GBOX) is just about the purest blockchain play that Dave has ever found for this portfolio. The company is an “emerging financial tech company that leverages proprietary blockchain security to build customized payment solutions”. In addition, the editor added GBOX today for two reasons: 1) the implementation of a special dividend series and 2) the stock is on sale after bottoming near $9. He considers this a speculative name, but likes the spin off of its stablecoin platform, the acquisition of Transact Europe and its technical picture. Dave also sold Conduent (NASDAQ:CNDT) before it slides any further. The complete commentary has a lot more on today’s action.

Headline Trader: Shares of “revolutionary fintech powerhouse” Square (SQ) have been soaring in recent days and is reaching overbought territory. Dan sold half of this position in late April for a double-digit return, and today he saw the perfect opportunity to sell the remainder of this volatile name. It brings a return of more than 21% in less than five months. Read the full write-up for more.

Technology Innovators: This portfolio easily had the best performer of the day as Clearfield (NASDAQ:CLFD) soared more than 19%. The wireless equipment name reported solid quarterly results with earnings per share beating the Zacks Consensus Estimate by over 51%. Revenues of $38.74 million also topped our expectations by 21%. The stock is now up nearly 44% in the portfolio since being added in late March. Brian doesn’t expect CLFD to see any negative impacts from inflation.

Have a Great Weekend!
Jim Giaquinto

Recommendations from Zacks' Private Portfolios:

Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>


Zacks Investment Research
Back at Record Highs Ahead of Big Tech Earnings Week
 

Related Articles

Back at Record Highs Ahead of Big Tech Earnings Week

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email