The S&P and NASDAQ continued trekking through record territory to begin this week, assisted by some encouraging news on coronavirus treatment.
It’s also a big help that the market is simply in a fantastic mood right now with those two indices recovering all of the pandemic plunge, despite not having a new relief package and recently receiving a rather cautious outlook from the Fed.
The market can’t get enough of positive news on fighting the coronavirus, so it really appreciated that the FDA issued an emergency use authorization for convalescent plasma for hospitalized patients. It’s not a vaccine of course, but it will save lives.
There’s also talk of the White House fast-tracking an experimental vaccine out of the U.K.
Given such encouragement on the virus front, tech wasn’t the only space propping up the market. The recovery names did well too, such as airlines, casinos and cruise companies. In fact, Carnival (NYSE:CUK) (CCL) soared more than 10% today.
Therefore, the Dow had the best performance with an advance of 1.35% (or around 378 points) to 28,308.46. The index may still be more than 5% away from a new high, but this did mark the first close above 28,000 since February before the virus really took hold.
But no one is talking about the Dow right now… not while its counterparts are making history.
The S&P soared past 3400 for the first time ever by jumping 1% to a new record of 3431.28. That’s the third closing high in the past six sessions.
The NASDAQ now has five new highs in that time, after rising 0.60% (or nearly 68 points) today to 11,379.72.
Even though the ‘back to normal’ stocks did well today, tech wasn’t sitting on its hands. All but one of the FAANGs were higher, led by Facebook (NASDAQ:FB, +1.64%) and Apple (NASDAQ:AAPL, +1.2%).
It’s Jackson Hole week… or, at least, a virtual version of it. Fed Chair Jerome Powell’s presentation could be one of the biggest events of the week, especially coming after his lackluster reading of the economy in the most recent Fed minutes.
The jobless claims number on Thursday will also be interesting. Was last week’s move above 1 million a blip? Or was the previous week’s move under 1 million the blip?
Let’s see what happens!
Today's Portfolio Highlights:
ETF Investor: Homebuilders have been hot recently, so it’s no surprise that Neena added some exposure to the space on Monday. But instead of going with segment leader ITB, the editor decided to add SPDR S&P Homebuilders ETF (NYSE:XHB). This fund offers more diversified exposure, as it also invests in building products and home furnishings companies… rather than just homebuilders. It’s also cheaper. Spending in home improvement is unlikely to end anytime soon, so XHB has tons of potential for the portfolio. Meanwhile, Neena also sold IShares Edge MSCI Min Vol USA ETF (USMV) for a more than 17% return. Read the full write-up for more on today’s moves.
Surprise Trader: Not only has Ambarella (NASDAQ:AMBA) been beating the Zacks Consensus Estimate for years now, but it soared past expectations by 500% last time! In fact, this video compression & image processing semiconductors company has an average surprise of nearly 300% over the past four quarters. Dave thinks the company, whose products are big in the autonomous vehicle industry, will continue this impressive history of outperformance when it reports again on Wednesday, September 2 after the bell. He’s especially confident because AMBA has an Earnings ESP of 100% for the quarter. The portfolio added this stock on Monday with a 12.5% allocation.
Technology Innovators: Earnings estimates for PAR Technology (PAR) are on the rise across the board, which has lifted this restaurant & retail technology company to a Zacks Rank #2 (Buy). More than 100,000 restaurants in over 110 countries use PAR’s point of sale hardware and software. In its most recent report, the company reported an earnings per share surprise of 25%. Once margins start to improve, Brian thinks this stock could show off some solid earnings power. The editor also sold InterDigial (IDCC) for a more than 9% return in a little over three months after the stock slipped all the way to a Zacks Rank #5 (Strong Sell). Read the full write-up for a lot more on today’s moves.
Black Box Trader: The portfolio cashed in a couple double-digit winners on Monday as part of its weekly adjustment, which included three changes in all. The stocks that were sold today included:
• Lumber Liquidators (NYSE:LL, +26.8%)
• AutoNation (NYSE:AN, +10.8%)
• Camping World Holdings (NYSE:CWH)
The new buys that replaced these names were:
• Big Lots (NYSE:BIG)
• BJs Wholesale Club (BJ)
• The Mosaic Company (NYSE:MOS)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
All the Best,
Jim Giaquinto
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