SPECIAL ALERT: The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, September 16. Kevin Matras, Kevin Cook, Dan Laboe, Ben Rains and Sheraz Mian will cover the investment landscape from several angles in this informative event.
Don’t miss your chance to hear:
• Ben and Dan Agree to Disagree on market valuation - is it still overvalued after this correction? Or is it harder to compare because of historically high valuations and a different interest rate environment? And does this tech-driven rally play a part?
• Kevin Matras answers your questions in Zacks Mailbag
• Sheraz and Dan choose one portfolio to give feedback for improvement
• And much more
So be sure to mark your calendar then log on to Zacks.com and bookmark this page.
The market just took a great first step toward ending its two-week losing streak, as each of the major indices jumped by more than 1% to kick things off on Monday.
Technology hasn’t been so cool lately, as we finally saw the pullback that many investors were waiting for. The NASDAQ plunged by more than 4% last week and over 3% the week before that.
But on Monday the index was once again leading the way with a surge of 1.87% (or about 203 points) to 11,056.65.
Interestingly, only one of the FAANGs were positive in the session, but it just so happened to be Apple (NASDAQ:AAPL) gaining a very solid 3% after seeing a double-digit plunge since its stock split.
Meanwhile, the S&P rose 1.27% to 3383.54 and the Dow advanced 1.18% (or about 327 points) to 27,993.33. These indices are coming back from a week that saw declines of 2.6% and 1.7%, respectively.
You know it’s probably going to be a good day when we get some encouraging vaccine news. The market loves to hear any type of progress on this front, such as AstraZeneca (NYSE:AZN)'s resumption of Phase III trials in the U.K. after a short delay (though the candidate is still on hold here in the U.S.).
It was also nice to talk about a few deals on Monday, including Oracle’s (ORCL, +4.3%) partnership with TikTok’s U.S. business and NVIDIA’s (NVDA) plan to buy Arm Holdings from SoftBank for $40 billion (more on that below).
Looking forward, the Fed could have a say in whether the market breaks this two-week skid. The Committee meets on Tuesday and Wednesday with Chair Powell speaking on the second day.
Nobody expects a change in interest rates, but there doesn’t have to be any such action to have an impact.
The market dropped last month when the Fed minutes warned that the pandemic could “weigh heavily” on the economy, but then advanced just a week later when Powell outlined a new policy for inflation that will keep rates historically low for even longer than originally expected.
So it was a nice start to the week, but there are four days left and some big comments from the Fed coming up.
Today's Portfolio Highlights:
Stocks Under $10: This portfolio had no exposure to the metals & mining space when the day began, but Brian quickly took care of that problem by adding Hecla Mining (HL) in the morning. This Zacks Rank #2 (Buy) is primarily a miner in the silver space and will further help to diversify the service. As its strong Zacks Rank attests, earnings estimates are on the rise for this year and next. But the editor also noticed a “huge turnaround” in margins, which could be a great thing for the stock price if it continues. Read the complete commentary for a lot more on today’s addition of HL… and be ready for more moves tomorrow. By the way, Maxar Technologies (NYSE:MAXR) jumped nearly 10.6% on Monday, which was one of the best performers of the day among all ZU names.
Surprise Trader: Shares of H.B. Fuller (FUL) are well off their coronavirus lows, but have yet to reach the highs seen earlier this year. Dave sees potential in such a situation, especially for a Zacks Rank #2 (Buy) that beat by nearly 26% last time. Looking forward, this specialty chemical company has a positive Earnings ESP for its next report, which comes after the bell on Wednesday, September 23. The editor added FUL on Monday with a 12.5% allocation, while also selling Eaton Vance (NYSE:EV). Read the full write-up for more on today’s moves and be ready for another addition later this week.
TAZR Trader: One of the big stories on Monday was NVIDIA (NASDAQ:NVDA) announcing its plan to buy Arm Holdings from SoftBank for approximately $40 billion. One analyst said this deal creates a “landscape-changing entity”. Though Kevin loves NVDA and its groundbreaking graphics chips, he calls this combination “a tantalizing but probably unrealistic quest”. It’s already drawing a quick backlash in the chip industry and will have to face a “gauntlet of regulators”. And even if it gets through all that, it would be one to two years before its finalized. Therefore, the editor trimmed some of his beloved NVDA position today for a nearly 140% return in about 6 months! Read the complete commentary for tons of analyst comments on this deal.
Black Box Trader: The portfolio changed half of its positions in this week’s adjustment and cashed in a double-digit winner along the way. The stocks that were sold today included:
• Berry Global (BERY, +10.7%)
• Owens Minor (OMI, +1,2%)
• Sportsman’s Warehouse (SPWH)
• Lumber Liquidators (NYSE:LL)
• Vista Outdoor (NYSE:VSTO)
The new buys that filled these open spots were:
• BMC Stock Holdings (NASDAQ:BMCH)
• DaVita (NYSE:DVA)
• Tapestry (NYSE:TPR)
• Target (NYSE:TGT)
• TRI Pointe Group (TPH)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
All the Best,
Jim Giaquinto
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