Strong Jobs Report Caps Off a Positive Week for Stocks

Another better-than-expected jobs report helped the major indices secure a short but sweet week of gains heading into the July 4th holiday.

The NASDAQ jumped 4.6% this week, while the S&P was up 4% and the Dow added 3.2%. The week was only four days due to the market being closed tomorrow.

The economy added 4.8 million jobs in June, which was the second straight month of substantial outperformance. Expectations were for less than 3 million.

The unemployment rate dipped to 11.1%, compared to the 12.4% expected.

Last month, the Government Employment Situation report truly astounded the market by adding 2.5 million jobs instead of losing around 8 million. And the unemployment rate dipped to 13.3% while expectations were for a rise to just under 20%.

Though this month’s results were ahead of forecasts again, it wasn’t as much of a surprise as May’s report. However, it was enough to keep the major indices moving higher today.

The NASDAQ rose 0.52% (or about 53 points) to 10,207.63, while the S&P advanced 0.45% to 3130.01. These indices now have four-day winning streaks each.

The NASDAQ also has a second consecutive session with a closing high.

The Dow was the only index with a negative close this week by slipping a little yesterday. But it gained more than 800 points in the previous two sessions and finished Thursday higher by 0.36% (or about 92 points) to 25,827.36.

Interestingly, jobless claims rose 1.427 million last week, which continued the recent pattern of this report missing expectations but slowly declining week-to-week.

We’ve had a good start to July and the third quarter with back-to-back winning sessions. The market will remain focused on the headlines this month, especially pertaining to the coronavirus count and the economic recovery.

But let’s worry about that on Monday and enjoy this long, holiday weekend.

Today's Portfolio Highlights:

Blockchain Innovators: Once a company starts using blockchain, it’s hard to go back. Dave was hesitant to buy electronic payments company Net Element (NETE) because it plans to divest that very business after a reverse merger with privately-held electronic vehicle company Mullen Technologies. But after thinking about it a little more, the editor decided there were TONS of uses for blockchain in an EV company from verification of charging station transactions to self-driving AI. Plus, the portfolio will now have a pre-IPO EV company in its quiver with the potential for amazing gains moving forward. It’s a high-risk play, but Dave decided to add NETE on Thursday. Read the full write-up for more on this new addition. The portfolio also had two of the top performers on Thursday with eGain Corp. (NASDAQ:EGAN, +7.82%) and Celestica (NYSE:CLS, +6.88%).

Counterstrike: Discount retailers have been big winners during this pandemic for obvious reasons. For example, Dollar Tree (NASDAQ:DLTR) reported a positive earnings surprise of 22% in its most recent report, which sent shares sharply higher. However, the stock eventually moved back down to technical levels… and right into Jeremy's wheelhouse. The editor bought a 5% position in DLTR on Thursday as shares appear to be grinding higher again. He’ll add more once the upward trajectory can be confirmed. Jeremy thinks the stock will eventually eclipse $100. The portfolio also sold Netflix (NASDAQ:NFLX) today for an 11.74% return as the streaming giant has pretty much hit the portfolio’s targets. Read the full write-up for a lot more on today’s moves, including a look at DLTR’s chart.

Surprise Trader: The Retail – Pharmacies & Drug Stores space is in the Top 12% of the Zacks Industry Rank, and Dave added one of the major players on Thursday. Walgreens Boots Alliance (NASDAQ:WBA) was picked up ahead of its next quarterly report on Thursday, July 9th before the bell. The company beat by 4.83% last time and has a positive Earnings ESP of 12.04% for next week. The editor added WBA with a 12.5% allocation, while also selling Schnitzer Steel (SCHN). Read the full write-up for more on today’s moves.

Have a Happy 4th of July!
Jim Giaquinto