Big Weekly Gains and a Couple New Highs

This month’s jobs report was nothing to write home about, but this week’s market gains certainly were!

The NASDAQ jumped 6% over the past five days, while the S&P was up 4.6% and the Dow increased 3.9%. Furthermore, the first two indices closed at all-time highs for the second straight session.

The market was making up for lost ground from last week, when SqueezeMania caused each of the major indices to drop more than 3%. All that ground has been recovered… and then some.

But investors are also feeling pretty good about earnings season. In fact, growth has resumed a quarter earlier than expected. Check out Director of Research Sheraz Mian’s article “Q4 Earnings Growth Turns Positive” for more details.

The FAANGs have been especially noteworthy this season with Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) both recording sales of more than $100 billion in a single quarter for the first time.

And the market’s good mood is rounded out by more stimulus and more vaccines on the horizon.

The week ended with the NASDAQ rising 0.57% (or about 78 points) on Friday to 13,856.30, while the S&P was up 0.39% to 3886.83. The Dow advanced 0.30% (or around 92 points) to 31,148.24. The latter two indices didn’t have a negative close all week and now have five-day winning streaks.

The Government Employment Situation for January was better than December, but still a modest disappointment. The economy added 49,000 jobs, which was way better than the downwardly revised 227,000 that were lost in the previous month. But it still missed expectations, though the unemployment rate improved to 6.3%.

Like last month though, the report didn’t break the market’s momentum. Such lackluster data keeps the need for more stimulus on the minds of investors and Washington. However, the new administration and Congress really don’t need much more convincing as they work to push through a nearly $2 trillion package.

Next week we’ll have more than 800 companies going to the plate as earnings season continues.

Today's Portfolio Highlights:

Counterstrike: We’ve been told all week that more buys were on the way... and today it finally happened! On Friday, Jeremy bought a 5% allocation in Qorvo (NASDAQ:QRVO) and a 10% allocation in FedEx (NYSE:FDX). QRVO is a Zacks Rank #2 (Buy) that provides core technologies and radio frequency for mobile, infrastructure and aerospace/defense applications. The company beat by 15% in its most recent report and even raised its Q4 guidance, yet the stock sold off. The editor is starting a position and might add more on further selling. Meanwhile, you know what FDX does. This Zacks Rank #1 (Strong Buy) doesn’t report until March, but it’s starting to grind upward and might be able to get back to recent highs over the next month. Read the full write-up for more specifics on today’s moves.

Surprise Trader: Less than a month ago, the portfolio sold Altra Industrial Motion (NASDAQ:AIMC) for a profit of more than 37%. Dave is hoping for more when the company reports again on Friday, February 12 before the bell. AIMC has beaten for three consecutive quarters now and has a positive Earnings ESP heading into the print. The editor added AIMC on Friday with an 11.5% allocation. He also sold the laggard Renasant (NASDAQ:RNST) for a slight loss amid a sea of green in the portfolio, including four double-digit winners. See the complete commentary for more. In other news, this service had a top performer today as Century Communities (NYSE:CCS) rose 19.5%.

Blockchain Innovators: Shares of Rekor Systems (NASDAQ:REKR) pulled back recently after this provider of advanced vehicle recognition systems announced an offering of approximately 5 million shares. Dave’s been watching this name for a while now and finally got an opportunity to pick it up at a good price. The company partnered with Cygnet to use blockchain for an end-to-end solution that simplifies parking permitting, electronic citation management and parking enforcement. Revenue is expected to come in at 176% year over year with EPS growth of 81.36%. The editor also decided to sell Axcelis Tech (ACLS) after the semiconductor equipment company slipped to a Zacks Rank #4 (Sell) and came down off its highs. The stock still brought a gain of 49.6% in less than six months. Read the full write-up for more.

Insider Trader: The market is pretty much ignoring Lantheus Holdings (NASDAQ:LNTH)... but Tracey isn’t! The company focuses on diagnostic medical imaging agents and products. Through its purchase of Progenics (NASDAQ:PGNX_old), it has a product called PyL that could replace the MRI in diagnosing prostate cancer in some cases. Analysts expect it to be approved. Shares of LNTH are up 59% in the past three months, and yet one director still bought three times in January through a 10b5-1 plan. The editor really likes to see insiders accumulate stock that’s going higher. LNTH will be trying for a third straight positive surprise when it reports again later this month. Tracey likes what she sees and wants to get involved before the rest of the market catches up. She bought LNTH on Friday with a 10% allocation. Get a lot more info on this new buy in the full write-up.

TAZR Trader: Earlier this week, Kevin added Vaxart (NASDAQ:VXRT) in his Healthcare Innovators portfolio. The company has the only tablet-form covid vaccine candidate. The recent Phase 1 trial has earned kudos and criticism from analysts. On the one hand, several adults who took the treatment did not develop a neutralizing antibody response. On the other hand, 75% of one-dose patients had a strong T-cell response. Perhaps most importantly though, the trial said that the vaccine was safe. Kevin thinks this innovative company has earned a 5% allocation for now. Make sure to read his in-depth analysis in the complete commentary, which includes both bullish and bearish cases.

Value Investor: Shares of GW Pharmaceuticals (OTC:GWPRF) (GWPH) have done really well in the portfolio since Tracey bought the stock back in November 2019. However, they won’t be moving anymore. As you’ve probably already heard, Jazz Pharmaceuticals (NASDAQ:JAZZ) agreed to acquire GWPH for $7.2 billion in cash and stock. It’s expected to close sometime in the second quarter of 2021. However, until the deal closes, it’s basically “dead money” in the portfolio. So the editor sold GWPH on Friday for a 98.4% return. Now she can relocate the cash into another position. Read the complete commentary for more on her decision.

Have a Great Weekend!
Jim Giaquinto