Market action was much more relaxed on Thursday compared to the session before, but we still saw new closing highs for two of the major indices as tech continues to flex its muscles this earnings season.
The NASDAQ rose another 0.55% (or about 73 points) to a record 13,530.92. The index soared more than 1.5% in each of the previous two sessions, so its up 4% for the week heading into Friday. And this is a short week!
Netflix (NFLX) slipped 1.1% today, but that’s all right since it soared nearly 17% on Wednesday after surpassing 200 million subscribers by adding 8.5 million more in its fourth quarter.
All the other FAANGs were higher, especially Apple (NASDAQ:AAPL, +3.67%), Facebook (NASDAQ:FB, +2.02%) and Amazon (NASDAQ:AMZN, +1.34%).
The S&P also reached a new record, but only barely by inching higher 0.03% to 3853.07. However, the Dow didn’t come along for the ride and slipped 0.04% (or about 12 points) to 31,176.01.
These indices are up about 2.3% and 1.2%, respectively, for the week heading into Friday. Stocks are coming off their first losing week of 2021.
The latest jobless claims report is a glass half full/empty situation. The 900,000 claims were actually better than expectations for 925,000 and the previous week’s result.
On the other hand… it’s still 900,000! Late last year it was in the low 700Ks and seemed to be improving, but coronavirus cases got a second wind (and another variant) that led to increased restrictions around the country.
But investors are hopeful that things are about to improve. The vaccines are on their way and the market expects President Biden and his team to “go big” on stimulus moving forward.
Meanwhile, earnings season has gotten off to a good start, though its still really early. Make sure to check out Sheraz Mian’s Earnings Trends article titled: “Early Q4 Results Show an Improving Earnings Picture”.
Today's Portfolio Highlights:
Income Investor: It’s time for some “new blood” in the portfolio, but first Maddy needs make room. On Thursday, she sold Community Healthcare Trust (NYSE:CHCT) and Life Storage (NYSE:LSI) for gains of 67.7% and 24.7%, respectively. Both of these positions have been lagging the S&P and are having trouble breaking above their 50-day MAs. The new buy is W.P. Carey (WPC), one of the biggest net-lease REITs in the market today with more than 1200 properties spread out over a diverse customer base that includes Marriott, Advance Auto Parts (NYSE:AAP), U-Haul and many others. However, no single tenant accounts for more than 3.3% of revenue. The editor thinks WPC is on its way to becoming a “dividend aristocrat”, as it has paid a quarterly dividend every year since its IPO in 1998 with no signs of stopping. It currently yields 6.2%. Maddy also likes its “rock-solid” balance sheet, investment-grade credit rating and below-average debt load. Read a lot more about today’s moves in the complete commentary.
Surprise Trader: Over the past four quarters, Nextgen Healthcare (NXGN) has beaten the Zacks Consensus Estimate each time and amassed an average surprise of more than 50%. That includes beats of 50% and 133% in the past two quarters. This Zacks Rank #2 (Buy) developer and marketer of healthcare information systems goes to the plate again after the bell on Wednesday, January 27. Dave likes the earnings momentum with NXGN, so he added the stock on Thursday with a 12.5% allocation. The editor also sold the rest of steel company Ternium (TX) for a nice return of 56.3% in less than three months. This marks the second double-digit return, as Dave sold the first half on December 1 for about 47%. Now the portfolio has more space for new buys. Read the full write-up for more on today’s action.
TAZR Trader: It was only yesterday that Kevin added Talend (TLND), a provider of big data cloud integration solutions that's more focused on Europe than the U.S. Well, the stock already made the top performers list in its first full session as a portfolio position. TLND gained 7.05%. This service also had the biggest winner of the day among all ZU portfolios, as BigCommerce Holdings (BIGC) jumped 13.7%. In other words, Kevin had two of the top five movers on Thursday.
ETF Investor: "The Nasdaq surged to another record high today while the S&P 500 and the Dow were almost unchanged, as investors weighed better than expected earnings amid further signs of weakness in the labor markets. Stocks had a record rally yesterday, the first day of the Biden presidency, on hopes that an improved vaccine rollout would lead to faster reopening of the economy.
"FAAMNG and other tech stocks that were big beneficiaries of the stay-at-home economy are back in favor. Netflix (NASDAQ:NFLX) surged almost 17% yesterday thanks to strong earnings. Apple, which reports next week, gained 3.3% today after a similar gain yesterday, on bullish analyst expectations for earnings." -- Neena Mishra
Until Tomorrow,
Jim Giaquinto
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