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Despite all the craziness about stimulus in the past few days; the market is still going into Friday’s session with solid gains for the week.
Each of the major indices are up well over 2% over the past four days. If they can hang on amid all the volatility and uncertainty out there, it would mark the third straight week of green for the NASDAQ and back-to-back winning runs for the Dow and S&P.
Of course, who knows what the headlines will be tomorrow? There’s been a market-moving story in each of the past few days, including President Trump returning to the White House after his covid announcement and mixed messages on the odds of a relief bill before the election.
On Thursday, it was Speaker Pelosi’s turn to throw cold water on stimulus. She said there would be no help for the airlines without a more comprehensive package.
President Trump tweeted about such a targeted measure on Wednesday, a day after calling off negotiations between Pelosi and Treasury Secretary Mnuchin for a trillion-dollar agreement.
While the news did disrupt the market momentarily on Thursday, it didn’t keep stocks from putting together a second straight session of advances.
The S&P rose 0.80% today to 3446.83, while the NASDAQ increased 0.50% (or about 56 points) to 11,420.98 and the Dow advanced 0.43% (or around 122 points) to 28,425.51.
That makes three positive sessions in the past four.
Even the airlines managed to stay positive with United Airlines (UAL), Delta (DAL) and Southwest (LUV) all rising by more than 1%.
The market also had to fight through a disappointing jobless claims report. While remaining under 1 million for a sixth straight week, the number is still very high at 840,000 and above expectations of around 820K to 825K.
Let’s see if we can get a strong finish to this chaotic week tomorrow…
Today's Portfolio Highlights:
Technology Innovators: It was time to “shuffle the deck” in this portfolio, so Brian added a name on Thursday and sold three others. The new buy is Rapid7 (NASDAQ:RPD), a Zacks Rank #2 (Buy) software security company that has been “destroying” earnings estimates. It topped the Zacks Consensus Estimate in three of the past four quarters, and the most recent surprise was a robust 600%! As its high Zacks Rank attests, earnings estimates for this year and next are on the rise. In fact, analysts expect a profit of 16 cents for 2021. Meanwhile, the editor sold Logitech Int’l (NASDAQ:LOGI) today for a 9.2% return in less than a month, while also getting out of nLight (LASR, +1.5%) and Descartes Systems Group (NASDAQ:DSGX). Learn more about today’s moves in the complete commentary.
Surprise Trader: Financials lead off earnings season, so Dave has plenty of possibilities from this space to consider. On Thursday, he chose to add First Financial Bankshares (NASDAQ:FFIN) with a 12.5% allocation. Why this name among all others? The editor really liked its 58.3% surprise last time. But best of all, FFIN has a positive Earnings ESP of 2.78% for the next report coming before the bell on Thursday, October 22. Also, the expectation for current year revenue growth of 19.95% year over year is “on the high side of what you typically see from a company as mundane as a bank”. The portfolio also sold Thor Industries (NYSE:THO) for a 3.2% profit in a little over two weeks. See the complete commentary for more.
Counterstrike: Earnings season is right around the corner, and Jeremy wants to raise some cash. Fortunately, he has several opportunities to do so. On Thursday, the portfolio sold two positions for double-digit returns. Lumber Liquidators (NYSE:LL) leaves the portfolio today with a 22.9% return in just two weeks, while Ultra Clean Holdings (NASDAQ:UCTT) brought in a 12.6% profit in one month. And the editor also added Keysight Technologies (NYSE:KEYS) with a 7% allocation. This provider of electronic design and test instrument systems wasn’t appealing to Jeremy in the $90s, but it just keeps moving higher and has turned him into a believer. Plus, KEYS is a Zacks Rank #1 (Strong Buy) that beat by 41% in its quarterly report from August. Read the full write-up for more on today’s action.
Marijuana Innovators: Vermont just became the 11th state to legalize recreational marijuana, which led to a great day for cannabis stocks and for this portfolio. And it didn’t hurt that Senator Kamala Harris said a Joe Biden administration would decriminalize marijuana during last night's Vice Presidential debate. As a result, this service had the top two winners on Thursday among all ZU names, as Canopy Growth (NYSE:CGC) jumped 13.5% and Aphria (NASDAQ:APHA) rose 10.3%.
Options Trader: "If all goes well tomorrow, it looks like we’ll get our 2nd higher weekly close in a row for both the Dow and the S&P, and the 3rd higher weekly close for the Nasdaq.
"(S)tocks continue to rally. And that’s because the economy continues to improve.
"Not only have we had a parade of better than expected economic reports over the last several months, but the future looks even better. One look at Q3 GDP expectations says it all. The Federal Reserve Bank of Atlanta is forecasting a 35.3% growth rate. The largest in history.
"In fact, analysts are expecting unprecedented growth for the remainder of the year. And for the annual GDP in 2021 to come in at 5%, which would be the largest annual growth rate in 38 years!
"Couple that with near zero interest rates for the foreseeable future (likely 3 years or more), and stocks appear to be gearing up for an historic rally." -- Kevin Matras
All the Best,
Jim Giaquinto
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