SPECIAL ALERT: Remember, the latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, June 10. Kevin Matras, Kevin Cook, Brian Bolan and Sheraz Mian will cover the investment landscape from several angles in this informative event.
Don't miss your chance to hear:
▪ Sheraz and Kevin Cook Agree to Disagree on whether the market has discounted the worst of the earnings recession even though we haven’t seen the trough yet
▪ Kevin Matras answers questions covering riots and the impact on the stock market, why some are calling this a bull market while others call it a bear market rally and more in Zacks Mailbag
▪ Sheraz and Brian 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.
The major indices are recovering lost milestones -- and even making new ones -- as this reopening rally continued on Monday with stocks advancing right into the close.
Tech may not be leading things right now as money flows into areas most impacted by the shutdown, but the NASDAQ had a huge head start in getting back to its highs. And today it finally got there.
The index jumped 1.13% (or about 110 points) to 9924.75, which marks a new record close! It’s also up more than 10.5% for the year.
The S&P (NYSE:SPY) is now barely positive for 2020 after rising 1.2% to 3232.39. It has now soared more than 45% from the coronavirus lows in late March.
But the Dow was again the big winner, extending its winning streak to six sessions. On Monday, it jumped another 1.7% (or about 461 points) to 27,572.44. The index recaptured 26K AND 27K last week, and is now a little more than 3% away from joining its counterparts in the green for the year.
Stocks are adding onto three straight weeks of gains. The Dow soared just under 7% last week, while the S&P jumped nearly 5% and the NASDAQ rose more than 3%. The market is also positive for the months of April and May.
The reasons behind this astounding rally are the same as they’ve been for a while now, but its worth repeating.
The country is beginning to reopen from the coronavirus shutdown. Even New York City – which was the epicenter of US cases – has begun phase 1 in its plan to finally leave the pandemic in the past.
Plus, we enjoyed some unexpectedly positive economic data on Friday, as the government employment report for May showed an increase of 2.5 million jobs. That sent the unemployment rate down to 13.3%, instead of rising to just under 20%.
Many investors have been worried for weeks about the market overheating, and those fears are likely to exacerbate with the indices making new highs and turning positive for the year just a few months after the worst plunge in history.
Actually, a pullback right about here wouldn’t be a bad idea. The editors will tell you that such a rest would be ‘healthy’.
However, the Fed has been the best friend of the bulls since this pandemic began, so we’ll have to see what Chair Jerome Powell has to say on Wednesday after the meeting.
Today's Portfolio Highlights:
Marijuana Innovators: The portfolio kicked off the week by adding OrganiGram Holdings (NASDAQ:OGI), a licensed producer of cannabis and cannabis-derived products primarily in Canada. Meanwhile, this service also had three of the top five performers of the day among all ZU names. The big winner was once again HEXO Corp. (NYSE:HEXO), which soared 47.4%. This stock is also the best performer over the past 30 days by jumping nearly 143%. The other two noteworthy performances on Monday were MTech Acquisition (KERN, +18.3%) and Aurora Cannabis (NYSE:ACB, +12.9%).
Stocks Under $10: The portfolio had a lot of fun with Altimmune (NASDAQ:ALT) as the clinical-stage immunotherapeutics company made numerous trips to the Top Movers list and climbed by about 200% at one point. However, Brian noticed that the stock has pulled back a bit lately, so he wants to protect a triple-digit gain. Therefore, the editor sold ALT on Monday for a 117.8% return in just a day under two months. He’ll fill that open spot with a new buy tomorrow.
Black Box (NYSE:BOX) Trader: All three of the stocks that were sold in this week's adjustment brought positive returns to the portfolio. The names that were sold on Monday included:
• Vector Group (NYSE:VGR, +6.9%)
• Graphic Packaging (NYSE:GPK, +5.9%)
• Teekay Tankers (NYSE:TNK, +1.6%)
The new buys that filled these spots are:
• Blue Apron (APRN)
• Cheniere Energy (NYSE:LNG)
• Williams-Sonoma (NYSE:WSM)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Counterstrike: "The S&P has achieved what was thought to be impossible just two months ago, moving into the green for the year. I’ve been doing this a while and only two times can I remember a move more shocking to so many people.
"One was the Trump election sell off and bounce, but that was a rather quick process. The other was the earnings recession in 2016 that saw a violent sell off and rally that never looked back.
"The bulls are on parade, but the VXX was positive today. This is telling us a pullback might be coming at some point. Either way, this market is way ahead of itself and a pullback would certainly be healthy." -- Jeremy Mullin
Until Tomorrow,
Jim Giaquinto
Recommendations from Zacks' Private Portfolios:
Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>
Zacks Investment Research