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▪ And much more
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After reaching new highs last Friday and then breaking for a three-day weekend; the major indices had a groggy start to this abbreviated week with mixed results on Tuesday. Along the way, the S&P’s seven-day surge came to an end.
The index slid 0.20% to 4343.54, marking its first session without a record close since Wednesday, June 23. The Dow made history of its own on Friday for the first time since May 7, but slipped back from highs today by declining 0.60% (or about 209 points) to 34,577.37.
But the NASDAQ kept moving forward and reached another milestone, as tech continues to lead like it did throughout most of the second quarter. The index advanced 0.17% (or more than 24 points) to secure another record at 14,663.64.
The FAANGs were mostly higher with especially noteworthy performances from Amazon (NASDAQ:AMZN, +4.7%), Apple (NASDAQ:AAPL, +1.5%) and Netflix (NASDAQ:NFLX, +1.4%).
Investors were in a good mood last week, especially after another ‘goldilocks’ jobs report on Friday. The economy added 850,000 jobs last month, soaring past expectations in the low 700Ks and exceeding the previous month by more than 200K. This marked the third consecutive session with encouraging employment data after ADP on Wednesday (+692K in June) and jobless claims on Thursday (under 400K).
But good moods don’t last long in this skittish market, so its understandable that investors would take a break from this record-setting pace after a long weekend and before the next earnings season.
In other news, the ISM Services report came to 60.1 in June, which is still solidly in expansion territory (above 50). However, it missed expectations and slumped from 64 in May, suggesting that the economy slowed a bit amid labor and supply shortages.
Today's Portfolio Highlights:
Stocks Under $10: People are finally going on vacation after being cooped up for over a year, which is great news for the hospitality business. Brian wants more exposure so he added Braemar Hotels and Resorts (BHR) on Tuesday, which operates as a REIT with a number of properties all over the country. The past four quarters have seen three beats and one match. It topped by 42% last time and now has an average surprise of 29% over those four quarters. Rising earnings estimates made BHR a Zacks Rank #2 (Buy). The editor is getting this name at a good price, especially when you consider that analysts are calling for 45% topline growth this year and 40% next year. He sees this as a long-term holding. In order to make room, Brian sold Conduent (NASDAQ:CNDT) and Comstock Mining (LODE), which are two of the service’s worst performers. Good riddance! Read more about today’s moves in the complete commentary.
Zacks Short Sell List: This week's adjustment included two changes. The portfolio short-covered BioMarin Pharmaceutical (NASDAQ:BMRN) and Yandex N.V. (NASDAQ:YNDX), and then replaced those names by adding Delta Air Lines (NYSE:DAL) and Las Vegas Sands (NYSE:LVS). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide. By the way, this portfolio had the top performer of the day among all ZU names as the short in JD.com (NASDAQ:JD) rose 5%. Meanwhile, the short in JOYY Inc. (NASDAQ:YY) also made the top five by advancing 3.7%.
Black Box Trader: Coming to you a day late due to the July 4th holiday, this portfolio swapped out six names for its weekly adjustment. The stocks that were sold today included:
• Realogy Holdings (RLGY, +5.3%)
• Navient Corp. (NASDAQ:NAVI)
• Archer Daniels Midland (NYSE:ADM)
• Foot Locker (NYSE:FL)
• Party City Holdco (NYSE:PRTY)
• Camping World (CWH)
The new buys that replaced these names are:
• Cleveland-Cliffs (NYSE:CLF)
• Ford (F)
• Internatioinal Paper (IP)
• Olin Corp. (NYSE:OLN)
• Steel Dynamics (NASDAQ:STLD)
• The Chemours Co. (CC)
Read the Black Box Trader’s Guide to learn more about this computer-driven service.
Surprise Trader: "We can’t all jump out of the three-day weekend ready to rock as well as I do. Sometimes, there’s a bit of a lingering hangover. That was the case for stocks today as equities failed to build on last week’s momentum at all-time highs, giving up ground instead and retreating to kick-off the shortened week.
"Earnings season is upon us yet again, with this being the last week of calm before the storm. With stocks up at all-time highs and tech leading the way higher, I am expecting a high bar for stocks to get over.
"Slow out of the gate for stocks but I find solace in the fact that we rallied off the lows. That sparks some hope for more recovery tomorrow." -- Dave Bartosiak
Have a Good Evening,
Jim Giaquinto
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