SPECIAL ALERT: Remember, the latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, August 12. Kevin Matras, David Bartosiak, Tracey Ryniec and Sheraz Mian will cover the investment landscape from several angles in this informative event.
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 your questions in Zacks Mailbag
▪ Sheraz and David 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 major indices went their separate ways again on Monday, with the Dow and S&P advancing for a seventh straight session but the NASDAQ moving lower as tech remained under pressure.
The Dow soared 1.3% (or nearly 360 points) to 27,791.44 to begin the week. Meanwhile, the S&P rose 0.27% to 3360.47.
These indices are coming off a week in which they gained 3.8% and 2.5%, respectively, after a better-than-expected jobs report.
It was a better day for names that would benefit from a more normal economy. For example, Caterpillar (CAT), Boeing (BA) and Dow (DOW) all jumped more than 5%.
And Carnival (CCL) soared by more than 8.5%!
Unfortunately, that left the NASDAQ out in the cold again. While the Dow and S&P have begun August with a solid run of gains, the tech-heavy index has now slipped for two consecutive sessions and is back below 11,000.
It was off 0.39% (or about 42 points) to 10,968.36. The NASDAQ also advanced 2.5% last week.
Apple (AAPL) still managed to gain nearly 1.5%, but Facebook (FB), Netflix (NFLX) and Microsoft (MSFT) all lost 2% or more.
We still don’t have a coronavirus relief package. However, President Trump signed a few executive orders over the weekend that might be able to tide us over until an actual deal is made.
The market still expects that Congress will get something done. The big question is: will these orders speed up the process on Capitol Hill or give them an excuse to dawdle even more?
One of the measures the President signed was an extension of the unemployment benefits, but at only $400 a week instead of the previous $600.
We’ll all be paying attention to Washington in the days ahead to see if they can get something done. However, we’ll also be watching the S&P, which is within 1% of a new high after these 7 straight days of gains.
Maybe we’ll kill two birds with one stone this week as a deal in Congress sends the S&P to a record!
Hey…hope springs eternal.
Today’s Portfolio Highlights:
Counterstrike: Shares of Dropbox (DBX) broke through resistance at $24 after its recent quarterly report, but has since plunged by approximately 20%. That’s exactly what this portfolio wants to see, so Jeremy added this Zacks Rank #2 (Buy) on Monday with a 5% allocation. DBX offers a platform that allows users to store and share files, photos and videos. The editor is getting in right before a Fibonacci test at around $18, and will add more if it finds support. He also sold Greenbrier Cos. (GBX) today for a 12.7% return in just under a month, while also getting out of Yext (YEXT). Read the complete commentary for more on today’s moves, including a look at DBX’s chart.
Commodity Innovators: The portfolio traded cocoa for steel on Monday by selling IPath Bloomberg Cocoa Subindex Total Return ETN (NIB) and buying Commercial Metals Company (CMC). NIB has been on a wild ride since being added in mid-March, and today Jeremy got out with a 12.3% return in front of a possible larger correction. Meanwhile, CMC is a play on the rising prices for metals and the breakout in steel stocks. This Zacks Rank #1 (Strong Buy) makes, recycles and markets steel and metal products, and it just broke out above $22 amid the industry’s newfound momentum. The editor added CMC in anticipation of a steel bull market though the end of the year. The stock reports later this month and should be considered a mid-term holding. Read the full write-up for more.
Black Box Trader: Two positions were replaced in this week’s adjustment. The portfolio sold National General (NGHC, +0.8%) and Sohu.com (SOHU). Those positions were immediately filled by adding Lumber Liquidators (LL) and Vista Outdoor (VSTO). Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Insider Trader: “Was today the start of the rotation play again?
“The transports and “old economy” stocks all did well today as tech and other growth stocks struggled as the recovery plays were back in play.
“Like last spring when the number of cases started to decline, along with hospitalizations, there’s a hope that we’re turning the corner and everyone can go back to work.
“And that also means that everyone can go on cruises, take a vacation, eat in restaurants and bars and go to movie theaters.” — Tracey Ryniec
All the Best,
Jim Giaquinto
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