SPECIAL ALERT: The September episode of the Zacks Ultimate Strategy Session is now available for viewing! Tune in to this “must-see” event when Kevin Matras, Kevin Cook, Dan Laboe, Ben Rains and Sheraz Mian discuss the investment landscape from several angles. 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 questions covering what you should do about the recent pullback and what stocks will do ahead of the election in Zacks Mailbag
• Sheraz and Dan choose one portfolio to give feedback for improvement
• And much more
Simply log on to Zacks.com and view the September episode here. And please let us know what you think of this format. Email all feedback to [email protected].
Tech continued to slowly recover from its two-week smackdown on Tuesday, while we all wait to hear what the Fed has to say after its most recent meeting.
The NASDAQ rose 1.21% (or about 133 points) today to 11,190.32, marking a two-day advance of just about 3% after Monday’s jump of nearly 1.9%.
But let’s not get too excited. The index is still more than 7% away from its closing high, which was reached less than two weeks ago!
All of the FAANGs were positive on Tuesday with Netflix (NFLX, +4.1%) and Facebook (FB, +2.36%) leading the way. Microsoft (MSFT) joined in with a 1.6% increase.
Apple (AAPL), which was the only FAANG that was positive yesterday, actually lagged everyone despite its virtual product launch event. The iPhone maker managed a rise of only 0.16%.
The S&P is back above 3400 (for the first time since September 4) after rising 0.52% to 3401.20. The Dow jumped by more than 200 points at its best in the session, but could only hold onto a gain of 0.01% (or about two points) to 27,995.60.
All of the indices rose by over 1% yesterday on positive vaccine news and a fresh round of deal making.
The next market mover could be the Fed, which will finish its two-day meeting tomorrow with comments from Chair Jerome Powell.
You wouldn’t think such a meeting could make much difference these days, since everyone and their mother knows that rates will stay right where they are at historical lows for the foreseeable future.
But the Fed has impacted the market twice in recent weeks… and it didn’t have to do anything to rates. We know they’ll be cautious… but HOW cautious? And what will be their tone?
“I expect the Fed to do nothing and keep some familiar language,” said Jeremy Mullin in Counterstrike.
“They will likely comment on the economy improving, the virus preventing a full recovery and reiterate that they are watching inflation. Should be no surprises so likely a non-event. A move after the fed over 3420 would be bullish.”
We’ll see what happens tomorrow…
Today’s Portfolio Highlights:
Stocks Under $10: The solid homebuilding industry should be a boon for Cornerstone Building Brands (CNR), which makes exterior building products like windows, vinyl siding and insulated metals panels. The company has beaten the Zacks Consensus Estimate in three of the past four quarters with a triple-digit surprise last time. CNR is still expected to lose money this year, but the estimate has narrowed to a loss of 45 cents from a loss of $1.42. But Brian is most excited about next year’s expectations, which have jumped to a profit of 34 cents from a loss of 22 cents in the past 60 days. These improving numbers have made the company a Zacks Rank #2 (Buy). The editor added CNR on Tuesday, while also getting out of A10 Networks (ATEN). Read the full write-up for more on today’s moves. In other news, this portfolio also had the best performer of the day among all ZU names as Digital Turbine (APPS) rose 13.3%. Meanwhile, Tufin Software Technologies (TUFN) also made the Top 5 with an increase of 5.8%.
Zacks Short List: It’s almost a brand new portfolio today, as this week’s adjustment included swapping out eight of the ten names. The stocks that were short-covered on Tuesday included:
• China Lodging (HTHT, +10%)
• The Trade Desk (TTD, +5.4%)
• Burlington Stores (BURL, +0.1%)
• Ross Stores (ROST)
• Las Vegas Sands (LVS)
• Five Below (FIVE)
• XPO Logistics (XPO)
• Performance Food Group (PFGC)
The new buys that filled these just-opened positions were:
• Netflix (NFLX)
• Nike (NKE)
• PVH Corp. (PVH)
• ServiceNow (NOW)
• StoneCo (STNE)
• TAL Education Group (TAL)
• V.F. Corp. (VFC)
• Yandex N.V. (YNDX)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Have a Good Evening,
Jim Giaquinto
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