Stocks were on their way to reclaiming new highs on Thursday, but a late selloff brought the major indices into the red as we wait for specifics on the Biden administration’s stimulus plan.
The Dow slipped 0.22% (or nearly 69 points) to 30,991.52, while the NASDAQ was off 0.12% (or around 16 points) to 13,112.64. Both of these indices momentarily reached intraday highs in the session, but couldn't hold on. The S&P was down 0.38% to 3795.54.
As of the market close on Thursday, we hadn’t received details on the new administration’s stimulus plan. However, it’ll likely be somewhere around $2 trillion.
And it couldn’t come at a better time, since we received more proof that the rise in coronavirus cases have stunted the economy’s recovery.
Case in point, jobless claims soared to 965,000 last week, which was remarkably worse than the previous week’s 787K. The result also left expectations of 800K in the dust.
Fortunately, the market didn’t have much of a reaction. With vaccines and relief packages in the air, investors are more interested in the future as we are hopefully reaching the homestretch of this pandemic. Plus, a weak report was widely expected given the increased restrictions.
In addition, Fed Chief Jerome Powell did his part to keep investor spirits up. In a virtual Q&A session on Thursday, he stated once again that interest rates will remain at historic lows for the time being as the economy fights back against covid.
The first week of 2021 saw solid gains across the board, but we’ve run into some sluggishness lately and the major indices head into Friday with losses for the week. However, we could easily get back into the green for this five-day stretch... which would also mean setting some new all-time highs.
Let’s get ready for the start of earnings season and see if we can finish this week on a high note.
Today's Portfolio Highlights:
Insider Trader: Shares of food company ConAgra (CAG) sold off after its earnings report earlier this month, as the Street seems to think the company is a pandemic play that will be out of luck once life returns to normal. But there’s a director who begs to differ. He bought 10,000 shares the day after the report, which was his first open market purchase since joining the board in 2009. What does he see that the market is missing? Perhaps he believes that the parent company of Duncan Hines, Birds Eye, Banquet and Reddi-Whip is being undervalued and has gained new customers because of the pandemic. Tracey was intrigued by the move and put some money to work by adding CAG on Thursday with a 10% allocation. By the way, the editor also sold PulteGroup (NYSE:PHM) today for a 3.5% profit as the homebuilder stocks “continue to go nowhere”. Read the full write-up for more on today’s moves.
Surprise Trader: For the third time this week, Dave is adding a name from the highly-ranked banks – southeast space. It’s in the top 17% of the Zacks Industry Rank. The new buy is Hancock Whitney (NASDAQ:HWC), which beat by more than 32% last quarter and has a positive Earnings ESP of 1.15% for the report coming after the bell on Wednesday, January 20. The company has seen a “sizable jump” in earnings expectations with analysts now forecasting a profit of $3.25 for next year from a covid-fueled loss of 82 cents this year. The editor added HWC on Thursday with a 12.5% allocation. Read the full write-up for more.
Counterstrike: "Huge move today of over 20% (in BlackBerry (NYSE:BB)). Outside that patent news from last night, I have no idea why the stock shot up. While I thought we would go higher, but I assumed it would take a few months to go to $11. Now it looks like we could get that this month!" said Jeremy. BB was the best performer of the day among all ZU names with a jump of nearly 22.5%. The stock has now rocketed to the top of this portfolio with a gain of more than 23% in less than a week!
All the Best,
Jim Giaquinto
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