SPECIAL ALERT: The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, December 9. Kevin Matras, Sheraz Mian, Jeremy Mullin, Tracey Ryniec and Madeleine Johnson will cover the investment landscape from several angles in this informative event.
Don’t miss your chance to hear:
▪ Tracey and Madeleine Agree to Disagree on whether Black Friday, when consumers rush to stores to get deals the day after Thanksgiving, is over in 2020 as online shopping takes precedence
▪ Kevin answers your questions in Zacks Mailbag
▪ Sheraz and Jeremy 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.
Lazy start to the week with two of the major indices pulling back from all-time highs. However, the NASDAQ refused to go along with the sluggishness and continued pushing higher.
The tech-heavy index rose another 0.45% (or about 55 points) to a new high of 12,519.95. That marks fresh records in three consecutive sessions and in four of the past five.
Meanwhile, the S&P slipped 0.19% to 3691.96, while the Dow was off 0.49% (or about 148 points) to 30,069.79.
The latter index snapped a four-day winning streak, but did manage to stay above 30K for a second straight session and only the third time ever.
Stocks are coming back from a solid week that saw the NASDAQ rise 2.1%, while the S&P advanced 1.7% and the Dow improved 1%. Each of them finished at all-time highs.
The theme of this week might be all about a stimulus package… or the lack thereof. While we’re waiting, stocks moved toward the safer names in tech on Monday.
Investors are hoping that the weaker-than-expected Government Employment Situation report on Friday will wake up Washington and underscore the need for more stimulus now despite all the good vaccine news of late.
“The market is waiting to hear some much-needed stimulus news. I would love to say I am shocked it is taking this long, but nothing on Capitol Hill shocks me anymore. The market is going to rally on news of that deal,” said Dave Bartosiak in today’s Surprise Trader.
In the last few days, we’ve received a bipartisan plan worth approximately $900 billion, along with statements from Senate Majority Leader McConnell and Speaker Pelosi that they both want to see a deal as soon as possible.
Despite all the setbacks in the past, the market does expect something to get done. Coronavirus cases continue to rise, the economic recovery is slowing and we’re still months away from the vaccines doing their jobs.
Let’s hope investors get what they want this holiday season.
Today's Portfolio Highlights:
Income Investor: The logo for life insurance giant Prudential Financial (NYSE:PRU) is the Rock of Gibraltar, and that message of strength and stability is a big reason why Maddy added this name on Monday. The company is highly diversified and has a very strong balance sheet, which adds some cushion amid all the uncertainty out there right now. It’s dividend is “one of the best in the sector” with a yield of 5.4% and a payout ratio at 34%. Best of all, PRU trades well below its peers and the broader market. The editor sees this name as “a strong, undervalued stock that is poised for a rebound from the pandemic”. Read the complete commentary for a lot more on this new addition.
Marijuana Innovators: This industry has been on a tear for the past few weeks, but Hexo Corp. (HEXO (NYSE:HEXO)) hasn’t come along for the ride. Therefore, this consumer-packaged goods cannabis company is a “legitimate bargain”, according to Dave. Shares of the company struggled over the past week due to an upcoming reverse split. The editor finds such a pullback to be “pretty silly” and the move below $1 to be a “pure opportunity”. Get the whole story on this buy in the full write-up.
Insider Trader: We don’t hear much about industrial names like Myers Industries (NYSE:MYE), but Tracey is bringing this company to the forefront today by adding it to the portfolio. The company makes polymer products and distributes for the tire, wheel and under-vehicle service industry. It recently outlined a 9-year strategic vision that will involve looking at M&A. Perhaps this forward-looking plan is why we saw a rare cluster buy among MYE’s insiders. Late last month, the CEO and three directors bought shares. In addition, it has great cash flows and pays a 3% dividend yield. Tracey added MYE with an 8% allocation. By the way, Tracey also sold the idled Bristol-Myers (BMY) position for a 7.6% return since late June. The full write-up has more specifics on today’s moves.
Blockchain Innovators: In addition to a recent upgrade to Zacks Rank #1 (Strong Buy) status, Alpha and Omega Semiconductor (NASDAQ:AOSL) was also the best performing stock of the day among all ZU services. The company soared 14.5%. Dave added AOSL back on August 31, and it has been a big winner for the portfolio with a gain of more than 104% since inception. The stock is now one of the biggest movers over the past 30 days with a rise of more than 52%. By the way, Camtek (NASDAQ:CAMT) also made the top 5 list with an advance of 6.45%.
Black Box Trader: More than half of the portfolio was changed this week with six swaps, including a double-digit winner. The positions that were sold today included:
• Owens & Minor (OMI, +16.7%)
• Flex Ltd. (NASDAQ:FLEX, +6.7%)
• General Motors (NYSE:GM, +6.6%)
• Realogy Holdings (RLGY, +5.3%)
• TRI Pointe Group (TPH)
• DICK'S Sporting Goods (DKS)
The new buys that filled these spots were:
• Adient PLC (NYSE:ADNT)
• Big Lots (NYSE:BIG)
• Brinker Int'l (EAT)
• Builders FirstSource (BLDR)
• Flagstar Bancorp (NYSE:FBC)
• L Brands (NYSE:LB)
Read the Black Box Trader’s Guide to learn more about this computer-driven service.
Counterstrike: "Very limited action today led to a mixed result with the S&P down 0.19% and the Nasdaq up 0.54%. Stimulus is coming, but the question is when and how much. Washington continues to stagnate, while COVID cases increase.
"The bears have a great case for stocks to go lower, but they refuse to do so. There is just too much money out there with limited places to go, so stocks stay bid.
"The day was pretty boring unless you were trading Tesla (NASDAQ:TSLA) or a few other movers. I have this feeling that things really slow down into the end of the year. So expect these low volumes that we are seeing to continue." -- Jeremy Mullin
Until Next Time,
Jim Giaquinto
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