NASDAQ Breaks Losing Streak and Gains for the Week

Stocks pulled back from a green morning to end Friday’s session mixed, but the NASDAQ managed to eke out a positive weekly performance for the first time in over a month.

The NASDAQ outperformed its counterparts by gaining 0.3% this week, which is impressive given all the pressure tech’s been under of late. The result broke a four-week losing streak. The index was actually down 0.48% (or 65 points) on Friday, but yesterday’s nearly 1.8% surge made all the difference.

The only index on positive ground today was the Dow, which advanced 0.36% (or around 123 points) to 34,207.84. However, it was off 0.5% for the week. The S&P slipped 0.08% to 4155.86 for a weekly decline of 0.4%.

It was a volatile five days with the major indices all dropping in the first three sessions, as investors can’t get their minds off rising inflation. But that three-day skid was snapped yesterday with a healthy bounce back, which included gains of more than 1% for the NASDAQ and S&P. As a result, the week looks a lot better than you’d think after slipping in four of the past five sessions.

Along the way, we enjoyed some really good earnings reports from retailers, including Target (NYSE:TGT), Walmart (NYSE:WMT), Home Depot (NYSE:HD) and Macy’s (M). And cryptocurrencies wreaked a bit of havoc, especially when Bitcoin slipped to around $30K on Wednesday, which was 50% off of recent highs. The digital currency bounced back on Thursday but was down again today.

You know how one can tell that earnings season is almost over? When our Director of Research Sheraz Mian’s new article is titled: “Looking Ahead to Q2 Earnings Season”. Another indicator is that more than 95% of S&P companies have reported with earnings up 48.4% from last year and revenues up 10.1%.

There are still some noteworthy reports scheduled to be released, especially NVIDIA (NASDAQ:NVDA) after the close on Wednesday. But we can pretty much say that it was a fantastic quarter with more expected in Q2. Now if only we could get the market to respond to strong results!

Today's Portfolio Highlights:

Surprise Trader: One of Ulta Beauty’s (ULTA) big positives is a “sticky” membership, who constantly come back to this retailer for all their beauty needs. And that was true even during the pandemic. The company has topped the Zacks Consensus Estimate for three straight quarters now, bringing a surprise of more than 50% last time. And now it has a positive Earnings ESP of 10.22% for the quarter coming after the bell on Thursday, May 27. Dave finished the week off by adding ULTA on Friday with a 12.5% allocation, while also getting out of National Vision (EYE) and taking a “slight hit”. Read the full write-up for more.

Counterstrike: Here’s a classic counterstrike move to finish out the week. Echo Global Logistics (NASDAQ:ECHO) is a leading logistics provider that offers transportation and supply chain management solutions. Shares jumped 20% after a strong quarterly report, which included a positive surprise of 30%. And then the stock pulled back. Jeremy added ECHO with a 4% allocation on Friday to participate in the next move higher. By the way, he also sold Casa Systems (NASDAQ:CASA) after a lackluster report. Read the full write-up for more on today’s moves.

TAZR Trader: It’s finally time for the portfolio to pick up Cadence Design Systems (NASDAQ:CDNS). Kevin has been watching this $35 billion provider of industrial automation design products for a while now, and a recent beat-and-raise quarter along with a pullback has put this stock in his wheelhouse. He’s a big fan of this Zacks Rank #2’s (Buy) core electronic design automation (EDA) software and services, which allow engineers to develop different types of integrated circuits (ICs). The portfolio added CNDS on Friday with a 7% allocation. Read the full write-up for more specifics on this new buy.

Options Trader: Back in November, Kevin added a few bull call spreads in homebuilder Lennar (NYSE:LEN) by buying to open 3 May 80.00 Calls and selling to open 3 May 90.00 Calls. Well, you may have noticed that those spreads expired today. There’s nothing you have to do... except enjoy the 190% gain! Kevin has more on this big winner in his complete commentary.

Have a Great Weekend!
Jim Giaquinto