Despite electoral craziness in Washington and an even worse-than-expected jobs report, stocks ended the first week of 2021 with solid gains and new highs.
The NASDAQ again was out front with a jump of 1.03% (or about 134 points) to 13,201.98. It was up 2.4% for the week.
The S&P rose 0.55% to 3824.68 and the Dow advanced 0.18% (or nearly 57 points) to 31,097.97. These indices increased 1.8% and 1.6%, respectively, for the week.
This marks the second straight session with new highs for all. The S&P and Dow also have four-day winning streaks now after stocks started the week (and year) with stiff losses on Monday.
The rally looked like it would fall apart mid-day on news that a Democrat senator might not be on board with the idea of $2000 stimulus checks. The upsurge resumed when he walked the comments back a bit, but it goes to show how stimulus is pretty much the only thing the market is thinking about right now.
Even today’s rough Government Employment Situation report is being viewed through the lens of more relief.
According to the report, the economy lost 140,000 jobs last month. Expectations were for a gain of 50,000, which was considered to be a major disappointment in its own right.
The print shows how much the economy is being impacted by the rising coronavirus cases and threat of further lockdowns.
But as far as investors are concerned, it also shows the need for even more stimulus. And with the Democrats in the control of the government for the next couple years, the market feels like they’ll get the relief as we wait for the vaccines to do their thing.
Let’s hope Washington cools off next week, while the market stays hot.
Today's Portfolio Highlights:
Counterstrike: Now that the elections are behind us and more stimulus is on the horizon, Jeremy finally feels comfortable enough to make a couple additions. On Friday, he added eXp World Holdings (NASDAQ:EXPI) and BlackBerry (NYSE:BB). EXPI is a Zacks Rank #2 (Buy) that provides a cloud-based real estate brokerage service. The stock broke through the 21-day today, so the editor picked up a 6% allocation with plans to add more on a pullback. However, he suggests that you use a limit order. BB is a Zacks Rank #1 (Strong Buy) cybersecurity software and services company that beat by 300% in its most recent report. It has also pulled back after spiking almost $10, so Jeremy added a 6% allocation before it breaks higher again. Get more specifics on these moves in the full write-up, including that limit order for EXPI.
Surprise Trader: Cable television company Shaw Communications (NYSE:SJR) has beaten the Zacks Consensus Estimate in the past two quarters. And now it has a positive Earnings ESP of 2.86% for the quarter coming before the bell on Wednesday, January 13. The company has yet to recover its pre-COVID levels above $20, so Dave wants to get in now before it does. He added SJR on Friday with a 12.5% allocation, while also selling Acuity (AYI) for a slight loss after getting “stuck in the mud” since its quarterly report. Read the full write-up for more.
TAZR Trader: Subscribers know that Kevin is a big fan of Internet search provider Baidu (NASDAQ:BIDU). He’s called this company both the “Google (NASDAQ:GOOGL) of China” and possibly even the “NVIDIA (NASDAQ:NVDA) of China”. And one of his favorite analysts consider it to be the “Tesla (NASDAQ:TSLA) of China”. That last idea got another boost today on reports that Baidu was partnering with fellow Chinese company Geely to make an electric vehicle company. The news sent shares of BIDU soaring by nearly 15.6% and made it the top performing stock among all ZU names on Friday. It’s also among the best performers over the past 30 days with a gain of 58.5% and is the second best performer in the portfolio by jumping 68% since being added. By the way, this portfolio had another name in the Top 5 movers today as Inseego (NASDAQ:INSG) advanced 8%.
Have a Great Weekend!
Jim Giaquinto
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