SPECIAL ALERT: The August episode of the Zacks Ultimate Strategy Session is now available for viewing! Tune in to this “must-see” event when Kevin Matras, David Bartosiak, Tracey Ryniec and Sheraz Mian discuss the investment landscape from several angles. Don’t miss your chance to hear:
▪ David and Tracey Agree to Disagree on whether the rise of Robinhood Traders and characters like Dave Portnoy are a sign that we’ve reached a market top
▪ Kevin answers questions covering what stocks will do in the run up to the election in Zacks Mailbag
▪ Sheraz and David choose one portfolio to give feedback for improvement
▪ And much more
Simply log on to Zacks.com and view the August episode here. And please let us know what you think of this format. Email all feedback to [email protected].
That was a rough way to end a couple of seven-day winning streaks!
The Dow and S&P seemed unstoppable in their quest for #8 on Tuesday, but a sharp, late-day plunge gave both indices their first negative sessions of August.
The S&P got within 0.5% of a new high today, but eventually slipped by 0.80% to 3,333.69. The Dow moved lower by 0.38% (or about 104 points) to 27,686.91.
However, it was the NASDAQ that, once again, had the worst performance. In fact, it was down for the third consecutive session today as money continues to flow out of tech.
The index declined 1.69% (or about 185 points) to 10,782.82.
The FAANGs offered no protection. Netflix (NFLX) dropped by more than 3%, while Apple (AAPL), Facebook (FB) and Amazon (AMZN) all slipped well over 2%. Alphabet (GOOG) was off over 1%.
The day got started on the right foot with news that Russia gave regulatory approval to a coronavirus vaccine. As we’ve said before, the market can’t get enough of positive vaccine news.
Of course, skepticism is always right behind the initial move higher on such news. This time, the good vibes didn’t even last the full session.
It didn’t help that Russia hasn’t even started Phase 3 trials on the drug.
Despite not having a vaccine yet OR a coronavirus relief plan out of Washington, the market has been in a great mood of late and is enjoying a fantastic start to August.
Money has been moving toward names that would benefit most from an open economy, which suggests that investors are optimistic that we’re close to the end of this pandemic.
But that doesn’t mean stocks are going to rise every day. The winning streak was fun, but the editors will tell you that a nice pullback would be very healthy for the market right now.
Let’s see what happens tomorrow…
Today’s Portfolio Highlights:
Stocks Under $10: Telecommunication stocks have been strong lately, so Brian added a name that subscribers might remember. A10 Networks (ATEN) is a provider of software based application networking solutions, which was in the portfolio earlier this year and brought a double-digit return. Now it’s back… and the editor thinks this stock will break out of the single digits and make it into the teens in the coming months. The company beat the Zacks Consensus Estimate in the past three quarters and has an average surprise of 38% over the past four. Rising earnings estimates made ATEN a Zacks Rank #2 (Buy). Brian added ATEN on Tuesday, while also dropping Akoustis Technologies (AKTS) and its ugly chart. Read the full write-up for more. By the way, this portfolio had two of the top performers on Tuesday with Funko (FNKO, +4.7%) and U.S. Xpress Enterprises (USX, +4.25%).
Surprise Trader: Last time Supernus Pharmaceuticals (SUPN) reported earnings, the stock rallied “dramatically” ahead of the announcement to $24 from $18. Dave isn’t positive when the next report is coming, but knows it will be soon and includes an Earnings ESP of 35.85%. He’s hoping the stock will runup again in anticipation of the release. SUPN was added on Tuesday with a 12.5% allocation. Furthermore, the addition of this Zacks Rank #2 (Buy) from the Medical-Generic Drugs industry will help to diversify the portfolio. In order to make room, the editor sold TPG Specialty Lending, a.k.a. Sixth Street Specialty Lending, (TSLX) for a more than 7% return in just under two weeks. Read the full write-up for more.
Zacks Short List: This week’s adjustments included three changes. First, the portfolio short-covered the following names:
• Xylem (XYL)
• Sunrun (RUN)
• Match Group (MTCH)
Then those open positions were filled by adding:
• Ross Stores (ROST)
• StoneCo (STNE)
• TMobile US (TMUS)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Have a Great Evening,
Jim Giaquinto
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