Stocks are well on their way to continuing this week’s positive reputation, as each of the major indices reached fresh closing highs in the first session back from the three-day Christmas weekend.
Historically speaking, this is a good week for stocks in even the most normal of circumstances. But now that the President has signed the long-awaited $900 billion stimulus package, the market seems set to end one of the most difficult years in history at record levels.
The S&P rose 0.87% on Monday to 3735.36, while the NASDAQ was up 0.74% (or just under 95 points) to 12,899.42. The Dow rose 0.68% (or more than 200 points) to 30,403.97.
That makes new records for all the indices to begin the “Santa Claus Rally”. Stocks are coming back from a mostly breakeven week, except for the NASDAQ’s 0.4% advance.
The President ended up signing the stimulus package a few days late, despite his criticisms of wasteful spending and meager checks to Americans. The move also averts a government shutdown.
It’s about time! ‘Tis not the season for cynicism, but Washington sure did run out the clock before getting some needed relief to the country amid rising coronavirus cases.
Meanwhile, the vaccine news has been encouraging, but we’re still months away from it making the kind of difference that will get us back to some kind of normal.
But it’s done.
And 2020 is pretty much done too. There’s approximately two-and-a-half days left before we end this challenging year, as the market will close early on Thursday and be closed for all of Friday.
Stocks are at record highs and seem set to finish with strong performances, including double-digit advances for two of the major indices. And there’s still some time to add more!
Today's Portfolio Highlights:
Home Run Investor: The electric vehicle (EV) space is exploding at the moment, and Brian added a company on Monday that will be able to “ride this wave”. Lithium Americas Corp. (NYSE:LAC) provides the key component in the batteries for EVs. The company has beaten the Zack Consensus Estimate in the past two quarters. Furthermore, the editor noticed some “bold call buying” last week, which suggests that people are expecting a big move in this name. Finally, earnings estimates are on the rise, so don’t be surprised if LAC is upgraded to a Zacks Rank #2 (Buy) soon. Learn more about this new addition in the complete commentary.
Surprise Trader: For the past five quarters, MSC Industrial Direct (NYSE:MSM) has beaten the Zacks Consensus Estimate. Dave thinks this metalworking and MRO (Maintenance, Repair & Operations) supplies distributor is set for another beat next month. The Zacks Rank #2 (Buy) has an Earnings ESP of 5.37% for the quarter coming before the bell on Wednesday, January 6. It beat by more than 13% last time. MSM was added on Monday with a 12.5% allocation. The editor also sold the disappointing FedEx (NYSE:FDX) position. Read the complete commentary for more on today’s moves.
Technology Innovators: There's not a whole lot of data just yet on Corsair Gaming (CRSR), but so far Brian really likes what he sees with this gaming play. The company is a designer, marketer and distributor of gaming and streaming peripherals, components and systems. CRSR registered a solid beat in its first quarter as a publicly-traded company, which is a great sign since first quarterly reports are usually a miss. Its no wonder this stock is a Zacks Rank #1 (Strong Buy). The editor believes this name has a great future and will provide some diversification to the portfolio. Read more about this new buy in the full write-up.
Black Box Trader: For its final adjustment of 2020, the portfolio swapped out three names. The stocks that were sold included:
• Sonos (NASDAQ:SONO)
• L Brands (NYSE:LB)
• Adient PLC (NYSE:ADNT)
The new buys that replaced these names are:
• Interpublic Group of Cos. (IPG)
• Jabil (JBL)
• Allstate (NYSE:ALL)
Read the Black Box Trader’s Guide to learn more about this computer-driven service.
Options Trader: “Late Sunday night, the President signed the Covid relief bill. And traders cheered the news today.
“As flawed as the bill was ($600 checks vs. the $2,000 he and others wanted), it likely came down to ‘something was better than nothing’ as time had run out for many with their unemployment benefits having finally expired.
“But even before the recent $900 billion relief bill was signed into law, and before yesterday’s increased payments bill passed the House, Congress was already talking about another stimulus/relief bill in the new year.
“Whether we get more money sooner or later, it does look like more money is coming. That’s great news for those individuals and businesses who need it. That’s great news for the economy since that money will immediately be spent, thus supporting the economy and jobs. And that, of course, is great news for the market.” – Kevin Matras
Until Next Time,
Jim Giaquinto
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