Thankfully, there was no repeat of last Thursday’s brutality in today’s session, as stocks rallied into the close and now have a great chance to post their third positive week in the past four.
The NASDAQ stretched its winning streak to five days after advancing 0.33% (or about 32 points) to 9943.05. The S&P also inched out an advance of 0.06% to 3115.34.
The Dow couldn’t follow its counterparts onto positive ground, but it did cut the day’s losses to only about 39 points from approximately 270 points earlier. The index was off 0.15% to 26,080.10.
That’s quite the improvement from last Thursday’s plunge of 6.9%, or 1861 points!
Stocks remain concerned about the increase in coronavirus cases in several states and China as these places try to reopen and get back to normal.
However, we’re not seeing the frantic rush to the exits like earlier in the year. At the moment, the market is more concerned about losing momentum on the reopenings than the virus itself.
Since its Thursday, we received the weekly jobless claims. The good news is that the downward trajectory of the past two-and-a-half months continued, as the nearly 1.51 million claims were lower than the previous week’s 1.54 million.
But that’s still an ugly number and marks only a small improvement. Plus, it fell short of expectations at only 1.3 million claims.
It’s especially frustrating because we’ve been getting some good economic numbers of late, including last month’s surprise employment situation report and the sharp rise in retail sales from earlier this week.
Still, the market remains hopeful that we’ve seen the worst of this pandemic and that we’re in the beginning stages of a vibrant recovery.
It also hopes that we can have a strong finish to the week tomorrow. The NASDAQ, which hasn’t seen a negative close in the past five days, is up 3.7% for the week heading into Friday. Meanwhile, the S&P and Dow are up 2.4% and 1.9%, respectively.
Today's Portfolio Highlights:
Counterstrike: Buyers finally stepped in and pushed Spotify (NYSE:SPOT) to all-time highs, which gave Jeremy a perfect opportunity to sell half of this successful position and pocket a 39.2% return in a little over a month. But this stock isn’t done. The editor is holding onto the other half because SPOT seems poised to hit $260. The portfolio also sold half of the volatile Teladoc (NYSE:TDOC) position for an 8.9% return in a little under two months.
Meanwhile, Jeremy also doubled down on natural and organic foods company United Natural Foods (NYSE:UNFI). Shares dropped after an EPS shortfall in its most recent report, but the stock is still a Zacks Rank #1 (Strong Buy). In fact, a deeper dive shows a company that has plenty of positives. Therefore, this could be a classic counterstrike situation with a stock that’s set to bounceback after an unnecessary dip. The editor originally added UNFI with a small 5% allocation in late May… and he added another 5% on Thursday. Read the full write-up for more on all of today’s moves. By the way, SPOT was one of the best performers today with a gain of 12.7%, while Zscaler (NASDAQ:ZS) also made the top five with a rise of 6.5%.
Technology Innovators: Taking profits is part of having a successful portfolio, so Brian decided to cash in three of his best positions on Thursday since no one knows what’s around the next corner. He sold ACM Research (NASDAQ:ACMR) for a 73.5% return in two months, Elastic N.V. (NYSE:ESTC) for a 43% profit in less than two months and Cirrus Logic (NASDAQ:CRUS) for 20% in about 10 months. But the editor also added today. He picked up EVO Payments (EVOP), a Zacks Rank #2 (Buy) payments service provider for merchants. The company has a great earnings history with four straight beats and an average surprise of 31% over that time. Make sure to read the complete commentary for specifics on all of today’s moves.
Surprise Trader: A nice move higher today from portfolio position Commercial Metals Company (NYSE:CMC, +5.6%) has Dave looking to add another infrastructure name. Therefore, he picked up Schnitzer Steel (SCHN), which is one of the largest metal recycling businesses in the country. The company beat by more than 29% in its last report and should be going to the plate again next week if history is any guide, though there still isn’t a confirmed date. Nevertheless, SCHN has an Earnings ESP of 17.65% for the upcoming release, while next year’s EPS growth is slated at 435%. SCHN was added on Thursday with a 12.5% allocation. The editor also decided to sell the rest of Covetrus (NASDAQ:CVET) for a solid 62.3% return in a little over a month. See the full report for more on today’s moves.
Commodity Innovators: We’re still waiting for the oil recovery, but Jeremy isn’t going to just sit back and twiddle his thumbs in the interim. Instead, he bought one of the largest energy companies in the world on Thursday to take advantage of the bounce back. Exxon Mobil (NYSE:XOM) is a $200 billion company and it pays a nice 7% dividend, which means the portfolio will be making money while it waits. Shares of XOM have found support at the 50-day after pulling back more about 15% from its highs. Obviously, you can consider this a long-term play. The editor also shed some underperformers today by selling United States Natural Gas ETF (UNG) and Teucrium Wheat ETF (WEAT). Read the full write-up for more.
Home Run Investor: Rising coronavirus cases in certain parts of the country may explain why shares of online marketplace Fiverr International (NYSE:FVRR) have surged. In fact, it’s jumped so high that Brian thinks its time to take the profits. Therefore, FVRR was sold on Thursday for an impressive 178.7% return in only two-and-a-half months! And while he’s in a selling mood, the editor also got out of SpartanNash (SPTN) for a slight gain and DSP Group (NASDAQ:DSPG) for a slight loss. Now there are several open positions in the portfolio, so get ready for more buying in the days ahead.
Healthcare Innovators: With the market refusing to selloff despite being overbought, Kevin doesn’t want to wait around anymore with Alnylam Pharmaceuticals (ALNY). This development-stage biopharmaceutical company is focused on the development of novel therapeutics based on RNA interference, which puts it at the forefront of groundbreaking science. The portfolio already pulled a 68% return from ALNY earlier this year. Some analysts are cautious about its valuation right now, but Kevin thinks the risks are a bit over-rated and decided this was a good spot to enter.
The editor also started a small position in Anavex Life Sciences (NASDAQ:AVXL), an emerging biopharma name that targets treatments for cancer and neurological diseases. Now this one IS considered to be highly speculative, especially since its too small for coverage from major Wall Street research houses. However, it’s a Zacks Rank #2 (Buy) and is making progress with some innovative products in its pipeline. Get all the specifics on these new buys in the full write-up. One more thing, this portfolio had a top performer in the session as a solid biotech space helped Editas Medicine (NASDAQ:EDIT) rise 8.6%.
All the Best,
Jim Giaquinto
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