The major indices all reached new records on Thursday as we turn the page on a tumultuous election season and prepare for a big jobs report.
The NASDAQ soared by 2.56% (or about 326 points) to 13,067.48. It more than made up for being the only index in the red on Wednesday.
The FAANGs were all positive, especially Apple (NASDAQ:AAPL, +3.41%), Alphabet (NASDAQ:GOOGL) (GOOG, +2.99%) and Facebook (NASDAQ:FB, +2.06%).
Meanwhile, the S&P jumped 1.48% to 3803.79 and the Dow added 0.69% (or around 211 points) to 31,041.13.
That makes new records for all the indices and the second straight all-time high for the Dow.
Congress officially certified last year’s presidential election early this morning after being delayed by the bizarre protests that spilled over into the Capitol itself on Wednesday.
Stocks held up rather well under the chaos, choosing to focus on the new stimulus we’ll likely be seeing with Democrats in full control of Congress. Such sentiment helped with today’s record-setting run as well.
But the market also appreciated some good old-fashioned economic data. The ISM Services report came in at 57.2, which was better than the previous month’s 55.9 and ahead of expectations under 55.
The report comes two days after the ISM Manufacturing report, which was also solid at 60.7. (For both reports, any reading over 50 indicates expansion.)
This week’s initial jobless claims report was also pretty decent. The 787,000 claims was about 3,000 less than the previous week and much better than expectations of more than 800K.
But the most significant piece of economic data comes tomorrow... and it’s not expected to be very positive. The Government Employment Situation is expected to show only 50K jobs added and the unemployment rate ticking slightly higher.
Such a disappointing result would be in keeping with the weak ADP data from yesterday and last month’s soft jobs report. The economy is definitely being limited by the rise in coronavirus cases, the new variant and fears of further restrictions.
However, another sluggish jobs report doesn’t necessarily mean that stocks will move lower. In fact, the major indices all hit new records on the day of last month’s weak print because it suggested more stimulus was required.
Today's Portfolio Highlights:
Blockchain Innovators: The shipping industry is a “prime candidate” for this portfolio, especially after Maersk and IBM (NYSE:IBM) formed a big partnership meant to increase the efficiency of shipping worldwide. Several ports have already signed up with this new platform called Tradelens. Dave got into the shipping space today through Danaos (NYSE:DAC), a leading international owner of containerships and chartering vessels to many of the world’s largest liner companies. This Zacks Rank #2 (Buy) has a “hot streak” of earnings beats dating back to 2017. The editor also sold SharpSpring (NASDAQ:SHSP) after the stock slipped to a Zacks Rank #5 (Strong Sell), but still secured a profit of 40.8% in less than four months. Read the full write-up for more on these moves.
Technology Innovators: A hot stock market is fun for investors… but a hot computer certainly isn’t. Thermon Group (THR) can help. The company provides engineered thermal solutions (or heat tracing) for process industries like energy, chemical processing and power generation. Most recently, THR reported a positive earnings surprise of 100%. Subsequently, earnings estimates moved higher and made the stock a Zacks Rank #2 (Buy). Brian sees a lot of potential in THR, so he added the stock on Thursday. Learn more about this new buy in the complete commentary.
Home Run Investor: Industries that are expected to benefit from the Democrats controlling Congress (and the Presidency) have been doing well since the Georgia runoffs. One such space is clean energy, which explains why Lithium Americas Corp. (NYSE:LAC) was the top performing stock among all ZU names on Thursday with a gain of 18.8%. The company provides the key component in the batteries for electric vehicles. Brian added it on December 28, and the stock is up more than 46% since then. By the way, Perion Network (NASDAQ:PERI), which was yesterday’s addition, already made it into the Top 5 by jumping 14.7% today.
Have a Great Evening,
Jim Giaquinto
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