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The major indices all overcame morning weakness on Thursday and moved higher in the session… but not by very much. Nevertheless, we still saw another day of new highs amid a fresh round of data on hot-button issues like employment and inflation.
The NASDAQ was the best performer on Thursday with an advance of 0.35% (or about 51 points) to 14,816.26. The increase ended two consecutive days of losses for the tech-heavy index, which goes into Friday’s session lower for the week by a little less than 20 points.
Meanwhile, the S&P was up 0.30% to 4460.83 and the Dow inched forward 0.04% (or nearly 15 points) to 35,499.85. These results make three straight sessions of record highs. If you include last Friday, then its actually four days of history in the past five sessions.
This is the first time since Thursday, August 5 that all major indices finished in the green at the same time. Otherwise, this has been a mixed week with investors trying to digest big portions of economic data.
Today’s schedule included the PPI, which increased 1% in July. That was quite a bit higher than expectations at 0.6% and showed no improvement from June’s 1% jump. The index is now up 7.8% in the previous 12 months. This marked the second straight day with a hot inflation indicator after Wednesday’s CPI, which soared another 5.4% year over year last month (though that was largely in-line with expectations).
In other news, the jobless claims number came to 375K last week, or 10K less than the previous print and the second consecutive month below 400K. That’s not quite as exciting as the more than 900K jobs that were added last month, but its still a move in the right direction as this economic recovery continues.
And let’s not forget that earnings season is still around… and is still pretty fantastic! One of this afternoon’s big reports was Disney (DIS), which reported a fiscal third quarter earnings surprise of more than 40% after the bell today. Revenue also beat expectations, as did the number of Disney+ subscribers at approximately 116 million. Even its parks seem to be getting back on track. Shares of the entertainment giant are up more than 5% afterhours, as of this writing.
Today's Portfolio Highlights:
Technology Innovators: A couple recent volume spikes in Vertiv Holding (VRT) has Brian thinking that a big player is getting long in this IT services name. The editor was already looking at this Zacks Rank #2 (Buy), but now he gets to also ride some heavy coattails. VRT provides digital infrastructure and continuity solutions, offering hardware, software, analytics and ongoing services. Over the past four quarters, it has beaten the Zacks Consensus Estimate three times and matched once, bringing an average positive surprise of 31% over that time. The valuation “isn’t that bad” for a company with rising earnings estimates and a topline growth expectation of 46% for this year. Plus, its margins are “moving in the right direction”. In addition to adding VRT on Thursday, Brian also sold Xperi Holding Corp. (NASDAQ:XPER) after the stock dropped to a Zacks Rank #5 (Strong Sell). Learn more about today’s moves in the complete commentary.
TAZR Trader: Shares of Micron (NASDAQ:MU) plunged double digits this week after (1) subdued comments from the CFO at a conference and (2) a major bank downgraded the stock, offering a bearish view for the whole memory chip space. But Kevin sees it differently. He believes this selloff has taken a lot of the risk out of what used to be considered a commodity business that should trade at 6X PE. Now, Micron is the leader in multiple innovative and customized applications for DRAM and NAND across PC, datacenter, mobile, autos and now 5G. The editor added to the portfolio’s MU position on Thursday right at strong weekly support going back to December. Read the full write-up for more.
Until Tomorrow,
Jim Giaquinto
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