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NASDAQ Rises More Than 2% for Another Record High

By Zacks Investment ResearchStock MarketsJul 06, 2020 09:15PM ET
NASDAQ Rises More Than 2% for Another Record High
By Zacks Investment Research   |  Jul 06, 2020 09:15PM ET
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SPECIAL ALERT: Remember, the latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, July 8. Kevin Matras, Jeremy Mullin, David Borun and Sheraz Mian will cover the investment landscape from several angles in this informative event.

Don’t miss your chance to hear:

▪ David and Jeremy Agree to Disagree on whether the equities markets are outpacing the Main Street recovery
▪ Kevin answers whether stocks can keep going up even though Coronavirus cases are back on the rise in Zacks Mailbag
▪ Sheraz and David choose one portfolio to give feedback for improvement
▪ And much more

So be sure to mark your calendar then log on to and bookmark this page.

The long, July 4th weekend didn’t cool of this market, as the major indices started the week with gains of more than 1.5% each.

The biggest winner (of course) was the NASDAQ on a strong day for tech. The index jumped 2.21% (or about 226 points) to 10,433.65. This marked the third straight session with a closing high.

The usual suspects led the way with each of the FAANGs rising by more than 2%. The biggest winners were Amazon (NASDAQ:AMZN, +5.77%) and Netflix (NASDAQ:NFLX, +3.55%). Microsoft (NASDAQ:MSFT) also participated with a 2.15% advance.

The Dow rose 1.78% (or nearly 460 points) to 26,287.03, while the S&P increased 1.59% to 3179.72. The latter index and the NASDAQ now have five day winning streaks.

Stocks are coming off a short but strong week that saw the NASDAQ improve 4.6%, the S&P advance 4% and the Dow rise 3.2%.

Last week was punctuated on Friday with a second straight better-than-expected Government Employment Situation report. The economy added 4.8 million jobs last month and the unemployment rate declined to 11.1%.

In addition to the strong day for tech, we also got another positive piece of data for this recovering economy. The ISM services index came in at 57.1 in June, which easily surpassed expectations of just about 50.

There was a better-than-expected ISM manufacturing report last week as well. (Remember, anything over 50 in these surveys suggest expansion.)

Unfortunately, coronavirus cases continued to rise over the weekend, which means the economic recovery remains uncertain. Despite being concerned about this, the market continues to move higher and may keep that upward trajectory as long as the headlines cooperate.

Today's Portfolio Highlights:

ETF Investor: The surge in digital transformation during this pandemic has brought an equal surge in the need for cybersecurity solutions. Neena gained exposure to that space on Monday by adding IShares Cybersecurity and Tech ETF (IHAK), which invests in companies that offer the most exposure to the full value chain of cybersecurity software, hardware and related services. It has more than $77 million in assets. Best of all, IHAK is the cheapest product in the space. This new addition makes ETFMG Prime Cyber Security ETF (HACK) expendable, especially since it’s more expensive and embroiled in a legal battle that may result in a management change later this year. The editor sold HACK today for a gain of 16.7%. Read the full write-up for more on today’s moves.

Surprise Trader: Tomorrow’s quarterly report from Levi Strauss (NYSE:LEVI) will be a good “heat check” for retail in the upcoming earnings season, according to Dave. Therefore, he added this jeans staple with a 12.5% allocation on Monday. The company has a positive Earnings ESP of 16.17% for the report coming after the bell on Tuesday, which means there’s a good chance that LEVI stretches its consecutive surprise streak to five quarters. The editor also sold Walgreens Boots Alliance (NASDAQ:WBA) before its report because the drugstore company slipped to a Zacks Rank #4 (Sell). It still managed a gain of 3% in just a few days. The complete commentary has more on today’s moves.

Technology Innovators: The portfolio is looking toward the future with today’s addition of cloud software company Blackbaud (NASDAQ:BLKB). This stock is still well below its pre-crash highs, which means there’s lots of running room to get back to that level. And Brian thinks it will make that run as more parts of the country reopen and the economy attempts to get back to normal. Plus, BLKB is a Zacks Rank #2 (Buy) and has beaten the Zacks Consensus Estimate for the past four quarters with a nice double-digit average surprise of 11% in that time. Read the full write-up for more on this new pick.

TAZR Trader: You can’t expect to backup the high-powered AI machines with the same old-fashioned disks. Something much more innovative is needed, which is where Pure Storage (NYSE:PSTG) comes in. Kevin calls this company the “cloud architecture of the future” because its solid-state, software-defined storage puts it on the high-speed, high-margin side of the industry. The editor added this Zacks Rank #2 (Buy) on Monday with a 7% allocation. He also bought Baidu (NASDAQ:BIDU), the AI-focused player in Chinese big data. The stock enters with a 5% position this week and will be added to on any pullbacks. The portfolio sold the underperforming Dropbox (NASDAQ:DBX) as well. Read the full write-up for more on all of these moves.

Black Box Trader: Well over half the portfolio was refreshed in this week's adjustment. Of the seven stocks that were sold, three were positive... and were also all double-digit returns! Those positions that left the services today included:

• BJ's Wholesale Club (BJ, +35%)
• Sportman's Warehouse (SPWH, +18.8%)
• Sprouts Farmers Market (NASDAQ:SFM, +12.6%)
• Phillips 66 (NYSE:PSX)
• Dine Brands Global (NYSE:DIN)
• Williams-Sonoma (NYSE:WSM)
• Aercap Holdings (NYSE:AER)

The new buys that replaced these names are:

• Cheniere Energy (NYSE:LNG)
• D.R. Horton (DHI)
• Lakeland Industries (NASDAQ:LAKE)
• Lowe's Cos. (NYSE:LOW)
• Patterson Cos. (PDCO)
• Principal Financial Group (NASDAQ:PFG)
• WillScot Corp. (NASDAQ:WSC)

Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

Counterstrike: "Some stocks are getting stretched out a bit, but the S&P is about to breakout. This makes it hard to short hot stocks as they could keep going in sympathy. What we will likely see is a break higher in S&P stocks and the tech start to pull in a bit. With that, the market will diverge, but grind its way higher.

"I have to say that when a market moves higher into bad news, I always think that somebody knows something. Perhaps, a vaccine success headline is just around the corner. While we aren’t aware of any good news to come, the market sure thinks there is something to be excited about.

"Looking to make a couple moves this week. We will be taking profits in some spots and adding new positions. Make sure to keep an eye out for alerts tomorrow."
-- Jeremy Mullin

Have a Good Evening,
Jim Giaquinto

Recommendations from Zacks' Private Portfolios:

Believe it or not, this article is not available on the 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
NASDAQ Rises More Than 2% for Another Record High

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NASDAQ Rises More Than 2% for Another Record High

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