New Month Kicks Off With New Records

It’ll be tough for September to repeat the impressive successes of August… but it sure did get off to a good start on Tuesday.

It might be a new month, but it’s an old story about tech leading the market higher. The NASDAQ soared 1.39% today (or about 164 points) to a new record of 11,939.67.

All of the FAANGs were higher, including another 4% advance for Apple (NASDAQ:AAPL) a day after its 4-for-1 stock split. The iPhone maker is now up more than 7% so far this week, which is only two days old.

The best performer in the group, though, was Netflix (NASDAQ:NFLX, +5.1%), while Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) (GOOG) each advanced by more than 1%.

But the big star on Tuesday was Zoom Video Communications (NASDAQ:ZM), which soared nearly 41% after an exceptional fiscal second-quarter report that included revenue jumping more than four times last year and a raised outlook for the fiscal third quarter.

ZM provides a video-first communications platform, so its strong quarterly results provided a lot of fuel to the work-from-home names.

In other market news, the S&P is back on a record pace after rising 0.75% to a new high of 3526.65. And the Dow rose 0.76% (or about 215 points) to 28,645.66.

Manufacturing activity continued to rise in August, as the ISM’s index reached 56. The result beat the previous month’s 54.2 and expectations for around 55. (Remember, anything over 50 means growth.)

The market just completed its fifth straight month of gains. The NASDAQ jumped by 9.6% in August, while the Dow was up 7.6% and the S&P improved 7%. It was the best August performance in decades.

Now we’ve begun September, which is historically the worst month of the year for stocks. And this super-hot market already has many investors expecting a sharp pullback after a record-setting run.

However, this market has been unpredictable all year, so a little thing like history isn’t going to be an intimidation.

Let’s just see what happens from here and be ready to act when appropriate.

Today's Portfolio Highlights:

Stocks Under $10: Over the past four quarters, Surface Oncology (NASDAQ:SURF) has beaten earnings estimates twice, matched once and missed once. That’s not bad for a small biotech name! Plus, while a loss is still expected for this year, it has narrowed enough to make this stock a Zacks Rank #2 (Buy). However, Brian is most impressed with SURF’s partnership with Merck. The two companies entered into a clinical trial to evaluate the effectiveness of combining a SURF drug with Merck’s Keytruda, which just so happened to generate more than $11 billion in sales last year. If this collaboration works, the editor expects the stock to double or triple before getting bought out. Read the full write-up for a lot more on SURF.

Zacks Top 10 Stocks: Investors are hoping that Zoom Video’s (ZM) impressive fiscal second-quarter performance will rub off on other work-from-home stocks, such as DocuSign (NASDAQ:DOCU). The e-signature solutions company reports after the bell on Thursday, but that didn’t keep shares from soaring 20.5% on Tuesday. There were several double-digit winners across the ZU services today, but none as big as DOCU.

Zacks Short List: This week's adjustment included only one change. The portfolio short-covered Ross Stores (NASDAQ:ROST) for a 2.5% return and replaced it by adding Marvell Technology Group (NASDAQ:MRVL). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

All the Best,
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