SPECIAL ALERT: The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, March 10. Kevin Matras, Jeremy Mullin, Daniel Laboe, Brian Bolan and Sheraz Mian will cover the investment landscape from several angles in this informative event.
Don’t miss your chance to hear:
▪ Jeremy and Brian Agree to Disagree on Investing in SPACs versus traditional IPOs
▪ Kevin answers your questions in Zacks Mailbag
▪ Sheraz and Daniel choose one portfolio to give feedback for improvement
▪ And much more
So be sure to mark your calendar then log on to Zacks.com and bookmark this page.
The market’s attitude was unchanged to begin a new week on Monday. The Dow and NASDAQ continue to go their separate ways as money flows out of tech in preparation for new stimulus and eventually a grand reopening.
Things are looking so good for the Dow these days that it momentarily reached a new high in the session. However, it pulled back by the close to finish with an advance of 0.97% (or about 306 points) to 31,802.44. The index easily outperformed its counterparts last week with a rise of 1.8%.
The S&P was down 0.54% to 3821.35 after gaining 0.8% last week. But the NASDAQ just keeps getting beaten up as investors run away from the space that kept things afloat during the worst of the pandemic. On Monday, the index slumped 2.41% (or just about 311 points) to 12,609.16. It dropped 2.1% last week.
All of the FAANGs were solidly lower, especially drops of 4% or more for Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) (GOOG) each. Meanwhile, Tesla (NASDAQ:TSLA) was off more than 5.8% and Microsoft (NASDAQ:MSFT) dipped 1.8%.
This rush toward recovery names was further reinforced on Monday by the Senate approving the covid stimulus package over the weekend, which pretty much ensures that the whole thing will be done before the March 14 expirations. The bill now goes back to the House for approval (possibly tomorrow) and then onto the President’s desk.
As a result, the 10-year Treasury yield again jumped past 1.6% in the session, which may explain why stocks weren’t able to keep their highs of the session.
Today's Portfolio Highlights:
Counterstrike: The solar names are close to long-term support levels, so Jeremy initiated “an aggressive trade” in the space by adding Enphase Energy (NASDAQ:ENPH) with a 5% allocation and Invesco Solar ETF (TAN) with a 4% allocation. The plan is to take a quick winner in TAN, while holding onto ENPH to capitalize on a “violent” bounce that’ll bring a larger gain. Meanwhile, the addition of Polaris (NYSE:PII) worked out just as planned, and today the editor sold it for a nice 17.4% in a little over a month as it comes into targets. Read the full write-up for more on all of today’s action.
TAZR Trader: You can put Kevin in the camp that believes this tech selloff is way overdone and setting up a huge buying opportunity for investors. Therefore, the editor started this week by adding a couple smaller digital advertising players. He picked up Magnite (MGNI) and Perion Network (NASDAQ:PERI) with 5% allocations each. These companies both saw firms raise their price targets lately. The drop in MGNI provides a great entry point for a stock that should benefit from Google’s decision to stop targeting ads from a user’s browsing history. PERI is expected to surpass $370 million in sales at 14% growth this year, so it’s only trading at 1.65X revenues. Read the full write-up for a lot more on these additions, including their buy ranges.
Marijuana Innovators: Guess (NYSE:GES) which healthcare giant has been quietly diversifying into research for cannabis-based drugs. None other than Johnson & Johnson (JNJ), which is fresh off the FDA approval for its single-dose covid vaccine. Dave added JNJ to the portfolio on Monday and has all the details in his full write-up.
Black Box Trader: The portfolio cashed in a double-digit profit in this week's adjustment as it switched out three positions. The stocks that were sold included:
• Olin Corp. (NYSE:OLN, +22.3%)
• Toll Brothers (NYSE:TOL, +3.2%)
• Flex Ltd. (NASDAQ:FLEX)
The new buys that replaced these names were:
• American Axle (NYSE:AXL) & Manufacturing (AXL)
• Athene Holdings (ATH)
• Resideo Technologies (NYSE:REZI)
Read the Black Box Trader’s Guide to learn more about this computer-driven service. By the way, this portfolio had a couple top performers today with Abercrombie & Fitch (ANF, +9%) and Dick's Sporting Goods (NYSE:DKS, +7.5%).
Until Tomorrow,
Jim Giaquinto
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