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Another volatile final hour on Wednesday ended the market’s two straight days of green… except for the good old NASDAQ, which stayed positive due to the robust tech sector.
The index was on track for a third consecutive day with a more than 1% advance until that late selloff. Nevertheless, the NASDAQ finished higher by 0.51% (or about 45 points) to 8854.39.
Tech stood out once again, including solid performances from bigwigs such as Netflix (NASDAQ:NFLX, +2.26%), Amazon (NASDAQ:AMZN, +1.4%), Apple (NASDAQ:AAPL, +1%) and Microsoft (NASDAQ:MSFT, +1%).
The S&P (NYSE:SPY) slipped 0.70% to 2848.42, while the Dow spoiled a more than 100-point jump at its best today to finish lower by 0.91% (or around 218 points) to 23,664.64.
Excitement over re-opening portions of the country appeared to wane a bit on Wednesday. The market would really like to see some encouraging evidence that these openings are just the tip of the iceberg… because we’re getting PLENTY of disheartening evidence that this economy is being hurt.
Private payrolls, according to ADP (NASDAQ:ADP), plunged 20.2 million in April. Believe it or not, that’s actually better than expected. However, that report will be the first of three consecutive days of really bad jobs data.
Of course, Thursday means it’s time for jobless claims. The market expects another 3 million claims tomorrow, which would be less than the previous week’s reading of 3.8 million but would bring the seven-week total to more than 33 million.
And then Friday includes the government’s monthly Employment Situation report. It was pretty bad last month when the shutdown was relatively new, so it will be even worse this time.
So it could be a rough couple of days to end this week… but what else is new? It’s been a rough couple of months for the market… and its still hanging in there. Let's stay focused on the future.
Today's Portfolio Highlights:
Surprise Trader: Anything grocery-related is doing pretty well during this shutdown, but Dave found a name from this space that has also beaten in 11 of the past 12 quarters. That's way before anybody even heard of the coronavirus. Nomad Foods (NYSE:NOMD) is a European frozen foods company, which is a good part of the space right now as people are stocking up as much as possible. This Zacks Rank #2 (Buy) has a positive Earnings ESP of 5.32% for the quarter coming before the bell tomorrow, May 7. The editor added NOMD on Wednesday with a 12.5% allocation and also sold QTS Realty (NYSE:QTS). See the full write-up for more on today’s moves.
Home Run Investor: For those wondering when people will feel comfortable getting back to their normal lives, the mantra in the media right now is “testing, testing, testing”. So that’s where Brian went for today’s addition to the portfolio. He bought Meridian Bioscience (NASDAQ:VIVO), which is a COVID testing play that’s had a lot of good news lately, including guiding higher in early April and a collaboration with QuantuMDx to help meet the demand for all this testing. Plus, VIVO has beaten earnings estimates for four straight quarters with an average surprise of 49%! The editor believes this stock could easily be $20 in a few weeks. By the way, he also sold Hostess Brands (NASDAQ:TWNK) today. Make sure to read the full write-up for more on this addition.
TAZR Trader: The big investors are buying mega cap ecommerce/cloud giants these days, so that’s where Kevin went for a portfolio addition on Wednesday. He decided to go with Alibaba (NYSE:BABA), the Zacks Rank #2 (Buy) “Amazon of China” that has seen earnings estimates double back for fiscal 2021. Plus, revenue growth is projected at 33% this year to a record $95 billion. And in another similarity to Amazon, BABA will invest more than $28 billion in cloud computing services over the next three years as this pandemic has increased demand that isn’t likely to wane after world economies re-open. The editor wouldn’t be surprised if BABA stock makes it above $230 this year and would add on any negative movement. Learn a lot more about this addition in the complete commentary.
Technology Innovators: Yesterday, Enphase Energy (NASDAQ:ENPH) reported solid first-quarter results, which included a positive earnings surprise of more than 18%. Furthermore, revenue for this solar play jumped over 100% year over year to $205.5 million. Shares soared approximately 18.7% on Wednesday, which made ENPH the best-performing stock among all ZU names. Brian added this position back on April 20 to take advantage of the resilient alternative energy space. The stock is up more than 35% since being added to the service.
All the Best,
Jim Giaquinto
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