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The NASDAQ and Dow continued going their separate ways on Wednesday with the former index failing to add onto its recent surge while the latter reached a new all-time high. Recovery stocks took off amid tepid inflation data and the passage of more stimulus, while tech took a breather.
The Dow soared 1.46% (or about 464 points) to 32,297.02, which marks its first closing high since February 24. It has advanced more than 4% over this four-day winning streak. Meanwhile, the S&P rose 0.60% to 3898.81, which means it’s within 1% of its own record.
The tech rebound on Tuesday had no follow though, as recovery names were again getting most of the attention on Wednesday. However, the NASDAQ managed to hold onto pretty much all of yesterday’s 3.7% surge, which was its best single-day performance of 2021 thus far. The index slipped only 0.04% (or less than five points) to 13,068.83.
There were a couple reasons for investors to remain bullish on Wednesday. First of all, the House passed the $1.9 trillion covid stimulus plan today. President Biden will sign it later this week or this weekend with the $1400 checks starting to roll out shortly thereafter.
The bill passed without any support from Republicans, which underscores why the market was so happy with the Democrats taking complete control of the government in the recent elections.
The passage was widely expected and, therefore, didn’t have much of an impact, but the Consumer Price Index was a bit more unpredictable and carried more potential to move the market. And it did!
Consumer prices rose last month by 0.4%, but that was in-line with expectations. In other words, we didn’t see any spikes that would suggest inflation becoming a problem sooner rather than later. Despite investor concerns, it’s still in check and the economic recovery can continue unabated for the time being.
As a result, the 10-year Treasury yield remained well below 1.6% for a second day after crossing over that mark this past Monday.
Today's Portfolio Highlights:
Home Run Investor: The recent tech rebound convinced Brian to add some exposure to that space, so he picked up Cutera (NASDAQ:CUTR) on Wednesday. This Zacks Rank #2 (Buy) is in the cosmetic laser business. It has beaten the Zacks Consensus Estimate in the past three quarters, but the editor most appreciates that those positive surprises have been growing over that time on a percentage basis. Plus, expectations for this year have flipped to a one-cent profit from an 8-cent loss over the past 30 days. In fact, earnings and sales growth expectations are very encouraging for this year and next. The addition of CUTR means the portfolio is only one position shy of being fully-invested at 15 names. Read the full write-up for more on today’s move.
Surprise Trader: Gaming stocks just can’t wait for the economy to re-open. The space is up big today and could see more momentum moving forward. Dave decided to get involved by adding Golden Entertainment (NASDAQ:GDEN) ahead of its quarterly report tomorrow after the bell. This diverse gaming company offers casino, gaming and lottery services. It has a positive Earnings ESP of 2.86% for the upcoming report. The editor bought GDEN on Wednesday with a 12.5% allocation, while also selling half of Primoris (PRIM) for a 23% return in less than a month. Read the full write-up for more on today’s moves.
Healthcare Innovators: After selling Guardant Health (NASDAQ:GH) exactly one week ago for a more than 83% return, this portfolio is looking to re-gain exposure to diagnostics companies. On Wednesday, Kevin added Exact Sciences (NASDAQ:EXAS), a molecular diagnostics company focused on the early detection and prevention of cancer. It’s best-known for its Cologuard test. Earnings estimates for EXAS were cut after their report last month, but that was due to heavy investment in its business to expand the menu of critical diagnostics. The editor thinks the future looks great for EXAS and sees an upside to at least $150 this year. The portfolio also got out of Acadia Pharma (ACAD) today. Read the full write-up for more on today’s moves.
All the Best,
Jim Giaquinto
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