The market just completed its best session of December (so far) on hopes that the latest round of Washington wrangling may finally lead to a long-awaited stimulus package.
Last night, lawmakers outlined an idea to split the more than $900 billion plan into two bills. And today, Congressional bigwigs were meeting to discuss a way forward on this front.
We’ve been disappointed before – many times actually – but the holiday spirit appears to be all around at the moment. Therefore, the major indices each jumped by more than 1% on Tuesday.
The S&P snapped its four-day losing streak and rose 1.29% to 3694.62. The index is once again knocking on the door of 3700 after closing above that mark last Tuesday.
The NASDAQ advanced 1.25% (or about 155 points) to a new record of 12,595.06. And the Dow is back above 30K with a surge of 1.13% (or about 337 points) to 30,199.31.
In addition to nearly every investor out there; do you know who else would really like to see a stimulus package? Fed Chair Jerome Powell!
And you can bet that he’ll bring it up at his press conference tomorrow, which comes after the Committee’s two day meeting that started today.
The Fed isn’t expected to unleash any surprises, but they don’t have to do anything dramatic to have an impact on this jittery market. We’ll be watching their comments on policy and their analysis on the economic recovery at a time of rising coronavirus cases.
Speaking of the pandemic, we’ll probably get another round of positive vaccine news later this week.
Moderna’s candidate seems on the cusp of getting emergency use authorization, which would be the second such designation after Pfizer/BioNTech. That means even more vaccine will be available to the public!
Unfortunately, the market has been spoiled by good vaccine news, and all it cares about right now is that elusive relief package.
Today's Portfolio Highlights:
Healthcare Innovators: It’s time to get back into Moderna (NASDAQ:MRNA)! You may remember Kevin selling this pharma back in mid November for a return of nearly 40%. The editor was concerned at the time with erratic sales estimates and a seemingly uninterested market in the wake of Pfizer’s announcement. However, the stock soared more than 50% leading up to Thanksgiving and is on the doorstep of another catalyst with the FDA’s emergency use authorization decision later this week. Today’s decline in shares provides this service with a great opportunity to buy an innovator in the messenger-RNA technology platform at a great price. Learn a lot more about today’s addition in the complete commentary. By the way, this portfolio also had the top performer among all ZU names on Tuesday as Anavex Life Sciences (NASDAQ:AVXL) jumped 15.4% on solid results for one of its treatments.
Stocks Under $10: Sometimes good timing is all you need. For example, Fluidigm (NASDAQ:FLDM) bottomed a few weeks ago and is in the early stages of a turnaround. This Zacks Rank #2 (Buy) is a medical instruments play that has beaten the Zacks Consensus Estimates in three of the past four quarters. But Brian was most impressed with the latest report, which included a surprise of 150% as the company posted a profit when everyone was expecting a loss. Likewise, earnings estimates for 2021 jumped to a profit of five cents from a loss of 24 cents over the last 60 days. The editor decided to add FLDM on Tuesday for his second buy of the week. The service also wanted to protect the profit in IVERIC bio (NASDAQ:ISEE), so the biotech was sold for a 22.35% return in about two months. Eton Pharmaceuticals (NASDAQ:ETON) was sold today as well. Read the full write up for more on today’s action, including Brian's plans to increase the number of holdings in this service.
TAZR Trader: Shares of Baidu (NASDAQ:BIDU) jumped on Tuesday after news that the company is talking with Chinese automakers about possibly producing electric vehicles. This AI-focused player in Chinese big data is now approaching most valuation targets around $180 to $190. Kevin decided this was a good time to sell about half of BIDU for a 40% return in a little over six months. Read the full write-up for more.
Zacks Short Sell List: This week's adjustment included two swaps. The stocks that were short-covered included Las Vegas Sands (NYSE:LVS) and Hexcel (NYSE:HXL). The new buys that filled these spots were Alcobra (ARCT) and Intuit (NASDAQ:INTU). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.
Surprise Trader: “The two-day malaise on Wall Street ended today with equities coming strong off the morning lows to storm higher. I was afraid early on we were going to have yet another gap up which sold off. Somewhere around lunch time, somebody flipped the switch and the bed came on strong.
“Good news for stocks the rest of the week. House Speaker Pelosi met with Schumer, McCarthy and McConnell to hammer home the details. Everyone seems confident that a deal will get done before the end of the year. I still do not suggest holding your breath.
“A great turnaround mid-day today. The risk-on was all around with the small caps leading the way. I saw plenty of speculative names roaring higher. This momentum is good to see. With an assist from Capitol Hill, it could be just what the market ordered.” – Dave Bartosiak
All the Best,
Jim Giaquinto
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