S&P Sets Another Record in Slow Summer Session

The market didn’t offer much on this quiet Friday session, but there was enough to give the S&P another new record and help two of the major indices to positive weekly performances.

It doesn’t take very much to set new all-time highs on the day after reaching a milestone. The S&P only advanced 0.19% (or about 8 points), but that was enough to make more history at 4247.44. The index reached the top yesterday for the first time since May 7 and finished the week with a gain of 0.4%.

The best result was again the NASDAQ, which advanced 0.35% (or around 49 points) on Friday to 14,069.42. The index outperformed its counterparts each day this week, as investors have been much calmer in the face of rising inflation. It easily had the best advance of the week with a surge of 1.8% now that the market’s cold shoulder toward tech is thawing.

As has been the case throughout this recovery, if the NASDAQ is on the way up, then the Dow must be struggling. It was vice-versa just a few weeks back when recovery stocks were getting all the attention. The Dow eked out a gain of 0.04% (or about 13 points) to 34,479.60, but the index was lower by 0.8% for the week.

The big news over the past five days was the CPI surging 5% in May, which was more than expected and the highest its been in nearly 30 years. On second thought though, the even bigger news this week was the market remaining calm during this evidence of rising inflation. Stocks plunged 2% on similar results last month, but this time the S&P made a new high. Go figure!

Next week will be all about the FOMC meeting. No change is expected and Fed Chair Jerome Powell will probably reiterate the supportive and accommodative statements he’s been making for months now. Investors have been skeptical of this super dovishness in the past, but are they finally coming around to the idea that this rising inflation really is “transitory”? It’ll be interesting to see what the Fed says… but even more interesting to see how the market reacts...

Today's Portfolio Highlights:

Technology Innovators: This buy is coming a day later than usual, but better late than never! The new addition is Grid Dynamics Holdings (NASDAQ:GDYN), which engages in architecting and delivering digital transformation programs principally in the retail, technology and financial sectors. The company has beaten the Zacks Consensus Estimates three times and matched once over the past four quarters, while rising earnings estimates have pushed it to a Zacks Rank #2 (Buy). Brian notes that valuation is a bit stretched, but is encouraged for the next few quarters given expectations for topline growth of 48% this year. Read the full write-up for more on this new pick.

Stocks Under $10: Shares of Cassava Sciences (NASDAQ:SAVA) are moving higher again after news of an FDA approval for a Biogen (NASDAQ:BIIB) Alzheimer’s therapy (though it still needs a post-clinical trial). The company is focused on early detection and treatment of neurodegenerative diseases like Alzheimer’s. As a result, SAVA was easily the best performer on Friday among all ZU names with a surge of more than 16%. However, the stock has been advancing for a while and is now up an amazing 947% in the portfolio since being added at around $8 back on January 5. As you might expect, SAVA is also the best performer over the past 30 days with a gain of over 105%.

Counterstrike: "Very slow action as the summer Friday hits us once again. This is something we will continue to see as the tone from market participants is much more laid back than where we were just a few months ago.

"Back and forth action all day, with the S&P and Nasdaq both trading slightly higher. There aren’t many market moving catalysts not that we are past CPI and job, so the FOMC next week will really be the next thing to watch. No change is expected and I think we will see much of the same rhetoric from Powell.

"Earnings aren’t coming till mid-July, so I foresee a very slow few weeks into the July 4th holiday. With that, I expect a low volume grind higher, with lower volatility." -- Jeremy Mullin

Have a Great Weekend!
Jim Giaquinto