Stocks Surge More Than 3% This Week

The market didn’t move much in Friday’s session, but it managed to hold onto most of Monday’s epic surge to finish out the week with solid gains.

The NASDAQ rose 0.43% (or just under 40 points) to 9324.59, while the S&P (NYSE:SPY) advanced 0.24% to 2955.45. The Dow closed lower by only 0.04% (or just about 9 points) to 24,465.16.

However, each of those indices jumped by more than 3% for the full week. That’s the market’s second weekly gain in the past three.

The big news this week came on Monday, of course, when Moderna (NASDAQ:MRNA) announced positive phase 1 results for its potential coronavirus vaccine. The Dow took off by more than 910 points on that day.

This hope for a vaccine comes right when economic re-openings are gaining momentum throughout the country. All 50 states have now at least begun to get back on track, though we know the process will be very uneven.

This is pretty exciting stuff for an economy that’s been mostly shutdown for about 2 months now with approximately 38 million jobs lost.

Now some folks will tell you to be cautious and not get your hopes too high… and unfortunately they’re right.

The coronavirus has not been defeated and re-opening the economy before a vaccine is risky. And while we expect the economic data to be bad, its uncertain how quickly we will rebound and when people will feel comfortable getting back to normal again.

And now tensions are rising with China! The world has been angry with them ever since this coronavirus really started taking hold, and now China looks set to impose a national security law on Hong Kong. You may have forgotten in all this virus mess that Hong Kong protests were a major news story some time back, but China sure hasn’t.

And here at home, the Senate is talking about delisting Chinese stocks from U.S. exchanges.

So there are plenty of challenges to come as we move into the final week of May.

However, we’ve got a well-deserved three-day weekend in front of us and a more than 30% surge in stocks behind us. So let’s enjoy the next few days (while still practicing social distancing of course) and be confident that we’ll deal with any problems as they come.

Today's Portfolio Highlights:

Marijuana Innovators: While its always impressive when one portfolio captures three of the Top Five performances of the day, it’s not exactly a rare occurrence. But to get three double-digit winners? That’s something you don’t see every day! But its what this portfolio accomplished on Friday with strong results from HEXO Corp. (NYSE:HEXO, +21.1%), Zynerba Pharma (ZYNE, +18.1%) and MTech Acquisition (KERN, +12%).

Counterstrike: “That 200-day at S&P 3000 is just calling everyone’s name. I’m hoping we can get this 200-day early next week so I can stop talking about it. I’m looking for a squeeze above that 300 level and a move to 3050. At that point, I’m looking on the short side and a pullback back below the 200-day.

“Should be an exciting week just purely based on the technical aspect. When you add in the geopolitical stuff that’s been going on, who knows what the week will bring. Ill be watching the China/Hong Kong issue that flared up last night. If you missed it, China is imposing national security laws on Hong Kong, which many view as the first step to China taking full control of the city. The world has spoken out against the action and with the recent pandemic being blamed on China, they are under a lot of heat.

“Next week we will see preliminary GDP and a handful of earnings. We know the situation with GDP, it will be bad. However, earnings are continuing to impress. Look at Splunk (NASDAQ:SPLK) and Palo Alto Networks (NYSE:PANW) today. There are always duds like Alibaba (NYSE:BABA), but overall, the price action after earnings has been impressive." -- Jeremy Mullin

Have a Great Memorial Day Weekend!
Jim Giaquinto