The market obviously approved of Fed Chair Jerome Powell’s comments at the virtual Jackson Hole meeting today, as stocks resumed their record-setting ways on Friday. All of the major indices finished the week with solid gains.
Basically, he’s willing to begin tapering the monthly bond purchases later this year, perhaps depending on next Friday’s Government Employment Situation report. However, interest rate hikes will likely not follow on its heels and could still be a ways off. And of course, the Chair continues to view rising inflation as transitory.
That’s quite a change in tone from yesterday when a trio of Fed bigwigs seemed much more enthusiastic about changing the monetary policy as soon as possible. The market preferred Mr. Powell’s more dovish approach.
After taking a break yesterday, the NASDAQ returned triumphantly to the positive side with a surge of 1.23% (or about 183 points) to 15,129.50. The S&P rose 0.88% to 4509.40. These indices closed at record highs for the first time since… Wednesday. They each had five-day winning streaks before taking a break on Thursday.
The Dow got in on the fun with a rise of 0.69% (or about 241 points) to 35,454.81, which puts it less than 0.5% from making its own history (which was last set on August 16).
The NASDAQ jumped 2.8% for the full week, while the S&P advanced 1.5%. The Dow increased just under 1%. That’s a nice turnaround from the previous week’s lackluster results that saw each of the indices in the red, led by a 1.1% dip for the Dow.
The major news for next week will be backloaded once again to Friday when the Government Employment Situation report is released. We’re coming off of two very strong reports, especially the July number of 943K jobs added easily beating expectations with the unemployment rate moving lower to 5.4%.
Something similar may provide the final straw in convincing the Fed to start the tapering process, perhaps as soon as the September meeting. So relax over the next couple of days and get ready for another hectic week in front of the Labor Day holiday.
Today's Portfolio Highlights:
Technology Innovators: The portfolio swapped a name in the ad buying space on Friday and protected a triple-digit win along the way. Brian sold Criteo (CRTO) for an epic 111.5% return in a little over nine months. The company has obviously performed well for the service, but its chart just “looks terrible” these days. However, The Trade Desk (NASDAQ:TTD) is in the same space and has been on a solid run since May.The Zacks Rank #2 (Buy) has also beaten the Zacks Consensus Estimate in each of the last four quarters with an average surprise of 91% over that time. TTD is also much bigger than CRTO with a $37 billion market cap vs. $2.5 billion. With revenue growth of 101% in its most recent quarter and more expected in the future, the editor thinks that TTD will grow into its hefty valuation and be a worthwhile replacement for CRTO. Read the full write-up for more on today’s moves.
Options Trader: When selling the September call in Nasdaq (NDAQ) last week for 64%, Kevin said he’d be open to buying the name again if it went lower or broke out through its previous highs. Well, it was breaking out today, so the editor bought to open a January 195.00 Call on Friday. The portfolio has already pulled three profits out of NDAQ this year and the editor is looking for even more. Read the full write-up for all the specifics.
Insider Trader: It was a busy Friday session with Tracey adding three names. The new additions and the insider buys are:
• 1stDibs.com (DIBS) – the CEO bought several times this month
• Digital Turbine (NASDAQ:APPS) – three directors added this month
• OneSpan (NASDAQ:OSPN) – the Interim CEO & General Counsel and four directors
DIBS is a luxury online marketplace that looks oversold, which makes the CEO’s move a “confidence buy”. APPS offers products and solutions for mobile operators, device OEMs and third parties. Shares have fallen 19% in three months despite reporting 104% organic revenue growth in its most recent quarter, so the three directors must see an opportunity. OSPN is a software company that offers remote banking transaction solutions and is making a transition to a recurring revenue model. It has experienced some “chaos in management”, but the cluster buy suggests that such problems are in the past, The editor put 10% into each position and still has plenty of cash to buy more next week. Read the full write-up for a lot more on today’s action.
Have a Great Weekend!
Jim Giaquinto
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