S&P and NASDAQ Each Gain More Than 5% in April

April may have ended with a whimper today as investors catch their breath after a prosperous deluge of Big Tech quarterly reports this week, but the month as a whole was fantastic with the market feeling pretty confident that we’re on the road to recovery.

The S&P slipped 0.72% on Friday to 4181.17, putting it up for the week by… one point! Meanwhile, the Dow declined 0.54% (or about 185 points) to 33, 874.85 and the NASDAQ dipped 0.85% (or nearly 120 points) to 13,962.68. These indices were down approximately 0.5% and 0.4%, respectively, over the past five days.

However, the data for April is as exciting as the weekly totals are boring. The NASDAQ jumped 5.4% this month and the S&P soared 5.2%. The Dow saw a nice advance of 2.7%.

It was 30 days full of impressive economic data (especially a jobs number that was 250K better than expectations), noteworthy quarterly performances (especially the FAANGs this week) and a Fed that plans to stay super accommodative for the foreseeable future. As a result, we saw quite a few record highs.

The market had an opportunity today to respond to the final FAANG report of the season. Last night, e-commerce giant Amazon (NASDAQ:AMZN) reported first-quarter earnings that beat the Zacks Consensus Estimate by almost 62%, while revenue surged 44% to $108.5 billion. Shares responded well overnight to the release, but unsurprisingly the stock dipped 0.11% on Friday.

That puts an end to a very lucrative Big Tech Week. The five major reports this week -- AMZN, Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOGL) (GOOG) and Microsoft (NASDAQ:MSFT) – surpassed expectations, even if the market didn’t always reward them for their numbers. These names totaled $74 billion in earnings on $311.6 billion in revenues, according to our Director of Research Sheraz Mian. It's no wonder his latest article is titled: “Big Tech’s Best Growth Days May Be Behind It”.

Earnings season as a whole has been pretty good too. Of the more than 60% of S&P companies that have reported so far, total earnings are up 51.1% from last year and revenues have advanced 8.3%. And we’re not done yet! There’ll be over 1000 more reports next week.

Today's Portfolio Highlights:

Stocks Under $10: After cutting three names earlier this week, Brian has some spots to fill. On Friday, he picked up Israel Chemicals (ICL), a Zacks Rank #2 (Buy) manufacturer of specialty fertilizers and specialty phosphates, flame retardants and water treatment solutions. The company will be reporting before the open on May 6. It has an average earnings surprise of approximately 75% over the past four quarters. The stock also has a “wonderful chart” with a steady 45 degree angle upward, along with a good valuation and some great growth. Make sure to read the full write-up for more specifics on this new addition. By the way, this portfolio had two of the best performers among all ZU names on Friday as Freightcar America (NASDAQ:RAIL) rose 11.2% and GT Biopharma (GTBP) advanced 9.3%.

ETF Investor: Housing was one of the red-hot areas in 2020, and the severe supply shortage promises to keep it scorching in 2021. The portfolio already has some exposure to this space through the SPDR S&P Homebuilding ETF (XHB), but Neena wants some more. The iShares U.S. Home Construction ETF (ITB) is the most popular homebuilder ETF. This market cap-weighted fund owns some of the biggest names in the field, including D.R. Horton (DHI), Lennar (NYSE:LEN), NVR (NYSE:NVR) and PulteGroup (NYSE:PHM). They make up about 45% of the portfolio. This addition will give the service great exposure to the top-ranked construction space. Read the full write-up for more.

Home Run Investor: For a while there, Apogee (NASDAQ:APOG) was a true home run by soaring more than 100%. However, the stock pulled back after its earnings report. Brian was patient with this glass products company, but it has now slipped to a Zacks Rank #4 (Sell). Therefore, the editor finally sold APOG on Friday while he could still pull a nearly 70% profit in a little over six months.

Technology Innovators: It’s the last day of the week and the last day of the month, so it’s a good time to take some cash off the table and open spots to be filled in the days ahead. The big winner was electronic manufacturer Jabil (JBL), which was sold today for a more than 50% return in about seven months. Brian also cleared some space by getting out of the underperforming NetScout Systems (NTCT) and Amkor Technology (NASDAQ:AMKR) positions.

Insider Trader: "Sell in May and go away is back in the news again, like it is every year at the end of April. Yawn.

"What if you had sold last May and gone away until October? The S&P 500 was up 16% during that time while the NASDAQ added 24.6%. It's silly to market time based on some old standard that no one adheres to anymore. Let's forget the "sell in May" thing in 2021.

"The bigger issue seems to be why big tech is not rallying on what were blockbuster earnings reports. In fact, a lot of stocks didn't get a bounce off of terrific earnings, across all sectors. Could another correction be coming soon?" -- Tracey Ryniec

Have a Great Weekend!
Jim Giaquinto