The Dow needed a really good session on Friday to finish this week in the green… and that’s exactly what it got!
Encouraging vaccine news – combined with the market’s overall resilience to rising coronavirus cases – led to solid gains for each of the major indices.
The Dow began the day lower by 0.4% for the week, but finished with an ADVANCE of just under 1% for the five days.
The index jumped 1.44% (or nearly 370 points) today to 26,075.30.
The S&P rose 1.05% to 3185.04 to finish the week with a 1.8% advance.
We know how influential the daily headlines can be on this market right now, and luckily we got a positive one today. Gilead’s remdesivir vaccine candidate had some good trial data by showing a reduction in the risk of death for coronavirus patients.
The market absolutely LOVES this kind of news because nothing would help the economic recovery more than eradicating this virus once and for all. In fact, stocks that are tied to the reopenings did well today.
But don’t feel too bad for the trailblazing tech space, which has been leading the market higher for a while now. The NASDAQ did uncharacteristically underperform its counterparts today, but the index still added 0.66% (or nearly 70 points) to log another record high of 10,617.44. It was up 4% for the week.
The indices now have back-to-back winning runs after the NASDAQ and S&P both jumped 4% last week and the Dow advanced 3.2%.
We’ll have to deal with all the same challenges and concerns when we get back to work on Monday, especially the rising number of cases and stalled reopening plans.
As if that wasn’t enough, we’ll also be watching the beginning of earnings season in the days ahead. Economic data has been pretty good of late and stocks are largely shrugging off the case count, but what will the quarterly results tell us?
Let’s enjoy the weekend and get ready for another crazy week in the market.
Today’s Portfolio Highlights:
Surprise Trader: For the second time this week, the portfolio added a name from the highly ranked transportation – truck industry (top 37%). Dave bought Heartland Express (HTLD) on Wednesday and today he picked up Marten Transport (MRTN). This Zacks Rank #2 (Buy) long-haul truckload carrier beat by nearly 4.2% in its last report, and now has a positive Earnings ESP of 4.35% for the one coming after the bell on Thursday, July 16. The editor added MRTN on Friday with a 12.5% allocation. He also sold Franklin Covey (FC), which turned out to be a “total dud from the start”. Read the full write-up for more on today’s moves. By the way, this portfolio had a the best performer of the day among all ZU names as Sleep Number (SNBR) jumped nearly 13.2%.
Technology Innovators: It may take a little more intestinal fortitude, but Brian is looking to add stocks that are near their highs right now. On Friday, he picked up PLDT (PHI), a Zacks Rank #1 (Strong Buy) wireless play in the Philippines. The stock bounced higher earlier this month and looks like it will continue to run well into the $30s. And as its high Zacks Rank shows, earnings estimates are moving upward for this year and next. The editor even likes its valuation. PHI may be able to get into the mid-$40s down the road, so Brian is adding it now. Read the full write-up for more. The portfolio also had the second best performer of the session with Tesla (TSLA) gaining 10.8%.
Counterstrike: “The market has no fear of the virus. In fact, it seems to think a vaccine will come soon or the new surge will blow over. Its pretty amazing to get this euphoria in this COVID atmosphere, but the Fed’s easy money policy had sparked the fire. New buys on Monday.” — Jeremy Mullin
Have a Great Weekend!
Jim Giaquinto
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