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The market pretty much repeated itself on Tuesday, as another strong session for tech kept the NASDAQ on a record-breaking pace. The other major indices also moved higher despite rising cases of the coronavirus.
A further similarity with Monday was the influence of Apple (NASDAQ:AAPL), which put the market on its back again by advancing 2.13% to another record high.
During its Worldwide Developers Conference this week, the iPhone maker has announced a transition to in-house chips and debuted new operating systems.
There were also strong performances today from Amazon (NASDAQ:AMZN, +1.86%) and Facebook (NASDAQ:FB, +1.26%).
As a result, the NASDAQ rose 0.74% (or nearly 75 points) on Tuesday to a new record of 10,131.37. This marks EIGHT straight days in the green and its second consecutive session with a closing high.
Meanwhile, the Dow rose 0.50% (or around 131 points) to 26,156.10 and the S&P was up 0.43% to 3131.29.
Stocks sold off into the close and finished off their highs. However, in addition to the NASDAQ’s streak, the Dow and S&P now have back-to-back positive sessions after rising 0.59% and 0.65%, respectively, on Monday.
It looked like we were headed for a rough session last night as futures plunged on a misunderstanding about the Phase 1 trade deal with China.
It appeared that White House trade advisor Peter Navarro said the deal was over, but he later clarified that the comments were taken out of context and the deal remains in place. Stock futures then bounced back.
But it goes to show again how susceptible the market is to headlines these days, especially ones that pertain to rising coronavirus cases in areas of the country attempting to reopen.
One more thing before we go. Today is the three-month anniversary of the coronavirus low on March 23. Now, the sickness is still very much with us and there’s a lot of questions about the sustainability of the market bounce-back and the economic recovery in general.
However, there’s nothing wrong with taking a moment and appreciating how far we’ve come. The NASDAQ is at new highs after soaring more than 45% since the low, while the other major indices are up approximately 40% in that time.
That’s a great response to the quickest plunge into a bear market that we’ve ever seen. So give yourself a pat on the back...
Today's Portfolio Highlights:
Blockchain Innovators: By Dave’s own admission, there are a few “boring” names in the portfolio. So he decided to spice things up on Tuesday by adding FangDD Network (DUO), a speculative name that marries real estate transactions with blockchain. More specifically, DUO formed a partnership to develop blockchain-based parking sales solutions. The editor thinks this idea could be adopted all over the world, but for now it’s primarily in China. However, its gross merchandise volume doubled to $13.3 billion in the first half of the year and current year revenue growth is forecasted at 52.6%. In order to make room and get rid of a “boring” name, Dave also sold DSP Group (NASDAQ:DSPG) today. Read the full write-up for more.
Counterstrike: The last week has seen a “massive” run higher for music streamer Spotify (NYSE:SPOT), and now the stock is just under the portfolio’s target. Jeremy thinks it’s close enough. He sold the stock on Tuesday for a 70.2% return in under 2 months. That’s quite a victory for a short-term portfolio like this one. And the editor isn’t done. He’ll be looking to get back in on any dips.
And as promised, the portfolio also added a new name. Williams-Sonoma (NYSE:WSM) is a Zacks Rank #1 (Strong Buy) specialty retailer of premium quality home products. The company crushed fiscal first quarter earnings estimates by over 722%! However, the price has been chopping around since the report and is beneath technical levels that Jeremy thinks it can overcome. Therefore, he added WSM today with a 12% allocation. Read a lot more about these moves in the complete commentary.
Stocks Under $10: The portfolio added a 14th name on Tuesday, which is one shy of being “full”. But Brian is going to stay here for now because he would like a little money at the ready while the market grinds higher in search of conviction. The new name is Costamare (NYSE:CMRE), a Zacks Rank #1 (Strong Buy) owner of containerships that are chartered to liner companies. It has beaten the Zacks Consensus Estimate for four straight quarters with an average surprise of 33%. The high Zacks Rank means earnings estimates are moving up, while the editor also likes its valuation and rising operating margin. Learn more about this new addition in the full write-up.
TAZR Trader: New technical breakouts in Box (BOX) and Dropbox (NASDAQ:DBX) have paused, which is giving Kevin a good opportunity to pick up these innovative cloud companies at attractive prices. BOX is a Zacks Rank #2 (Buy) that provides a cloud content management platform, while DBX is a Zack Rank #1 (Strong Buy) cloud storage play. The editor added each with 7% allocations. Read the full write-up for more.
Zacks Short List: The portfolio swapped out three positions in this week's adjustment. The stocks that were short-covered include:
• Royal Dutch Shell (LON:RDSa) (RDS.A, +6.7%)
• Cimarex Energy (NYSE:XEC, +3.6%)
• TMobile US (TMUS)
The new buys that replaced these names were:
• NuVasive (NASDAQ:NUVA)
• PVH Corp. (NYSE:PVH)
• The TJX Companies (NYSE:TJX)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Have a Great Evening,
Jim Giaquinto
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