The Dow took its first break of the week on Thursday, but the other major indices continued to set new highs as we move toward the monthly jobs report tomorrow. Meanwhile, stocks are all set for a fourth straight week of gains.
Today’s session was the calm between two storms. Investors appreciated the Fed’s decision after its two-day meeting yesterday, which pretty much went as expected. In a nutshell, the economy has recovered enough to begin scaling back monthly bond purchases that were put in place during the pandemic. And there doesn’t appear to be any interest rate hikes on the immediate horizon.
And tomorrow is the big Government Employment Situation report. Expectations are for approximately 450K jobs being added… but we all remember what happened last time. The forecast for September called for 500K, but the end result was only 194K. (To be fair though, it really didn’t hurt October, which was one of the best months of 2021.)
In between the Fed yesterday and the jobs report tomorrow, we had Thursday’s session and the first decline of a major index since well before Halloween. The Dow slipped 0.09% (or about 33 points) to 36,124.23. It hadn’t finished in the red since Wednesday, October 27.
But its counterparts just kept going. The NASDAQ rose 0.81% (or nearly 129 points) to 15940.31, while the S&P was up 0.42% to 4680.06. That’s an impressive six straight days of new highs for each index.
The jobs data leading up to the major report has been very solid, including jobless claims for last week coming in at 269,000. The result beat expectations and last week’s print, while also marking the fourth straight week beneath 300K. And of course, it marks a new pandemic-era low.
And October’s ADP employment number (released on Wednesday) came to 571K, which beat expectations of 400K. Unfortunately, none of these other reports can be considered a bellwether for the main event on Friday… but it’s still nice to see.
Stocks are well on their way to a fourth straight positive week. With one day to go, the NASDAQ is up nearly 3% over the four days and the S&P has advanced approximately 1.6%. The Dow is higher by just under 1%.
Today’s Portfolio Highlights:
Surprise Trader: Shares of shoemaker Steven Madden (NASDAQ:SHOO) have soared double digits since Dave picked it up a little more than two weeks ago. And it could rise even further after it’s positive quarterly report. The editor decided to sell half of SHOO for more than 15% and will leave the rest to see how much higher it can go. The new buy is insurance company GoHealth (GOCO), which is expected to grow revenue nearly 43% for this year and over 27% for next. That’s pretty good for a name from the “boring” insurance space. This Zacks Rank #2 (Buy) beat by 40% last quarter and now has a positive Earnings ESP of 22% for the quarter coming after the bell on Tuesday, November 9. Dave added GOCO on Thursday with a 12.5% allocation. Read the full write-up for more.
Technology Innovators: With a major firm downgrading NetApp (NASDAQ:NTAP) on fears of slower IT spending, Brian thought this was a good time to sell this computer storage company. It leaves the portfolio with a nice gain of 41.2% in over nine months. He also dropped i3 Verticals (IIIV) on Thursday. The new buy is Materialise (NASDAQ:MTLS), a Zacks Rank #1 (Strong Buy) Internet software name that has beaten the Zacks Consensus Estimate in three of the last four quarters. The editor is most impressed with the margins, which have improved to 5.2% from a loss of 2.3% of late. This improvement should boost earnings estimates even higher. Brian thinks that MTLS will get over $30 by the end of the year. Read the full write-up for more on today’s action.
Options Trader: The portfolio’s premium in its Nasdaq (NDAQ) option has more than doubled, so it was time for Kevin to reposition once again. This marks the FOURTH time he pulled profits out of this company! Specifically, the service sold to close the Jan22 195.00 Call for a 126% return, and then bought to open a March 22 220.Call. Now it’s a “free trade” that can keep making money if the stock continues higher, but will never give up the principal if it drops. The service also picked up Applied Materials (NASDAQ:AMAT) by buying to open a March22 150.00 Call. This semiconductor equipment company is a Zacks Rank #2 (Buy) with a positive Earnings ESP of 0.52% for the quarter coming on November 11. The stock is breaking out to the upside of a 7-month long, bullish symmetrical triangle pattern. Get more specifics in the full write-up.
TAZR Trader: After beating the Zacks Consensus Estimate by more than 12% in its third quarter report, Kevin decided to trim some of Qualcomm (NASDAQ:QCOM) and collect a 14.4% return in less than six months. In other news, Fastly (NYSE:FSLY) announced better-than-expected results in its quarterly report without heavy customer losses as feared. The editor picked up the stock late last month with a small starter position, but added more on Thursday between $52 and $54. Read the full write-up for specifics on today’s moves, along with earnings updates for Square (SQ), BigCommerce (BIGC) and Pinterest (NYSE:PINS).
Stocks Under $10: The best performer in this portfolio was also the biggest winner among all ZU services on Thursday. Cross Country Healthcare (NASDAQ:CCRN) has jumped more than 221% since Brian added it just about a year ago on November 17, 2020. Recently, this provider of healthcare staffing and workforce management services reported solid third-quarter results, which included a positive earnings surprise of nearly 75%. Furthermore, revenues of $374.91 million beat our expectations by over 18%. Shares of CCRN rose 20% today, which was more than any other ZU service.
See You on Friday,
Jim Giaquinto
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