Another strong performance from tech kept the NASDAQ and S&P on their record-breaking paces Wednesday, while the Dow also closed higher after snapping a three-day winning streak yesterday.
All of the FAANGs were solidly higher in the session, especially Netflix (NFLX, +11.6%) and Facebook (FB, +8.2%). Amazon (AMZN) and Alphabet (GOOG) were both up nearly 3%, while Apple (AAPL) rose about 1.4% following a rare decline for the $2 trillion company on Tuesday.
As a result, the NASDAQ easily outperformed its counterparts by rising 1.73% (or just under 200 points) to 11,665.06. Meanwhile, the S&P jumped 1.02% to 3478.73.
The NASDAQ has now made history for five straight days, while the S&P has put together four consecutive record highs.
One of the biggest stories on Wednesday, though, was software company salesforce.com (CRM), which soared 26% after beating second-quarter expectations and raising its revenue guidance. Remember that CRM will be joining the Dow on Monday.
Speaking of the Dow, the index advanced 0.30% (or about 83 points) to 28,331.92. It has now been up in four of the past five days.
We also enjoyed some good news outside of technology and salesforce. Moderna (MDRA) released encouraging results for its coronavirus vaccine, sending the stock higher by 6.4%.
In addition, durable goods orders surged over 11% in July, which easily beat expectations and marked three consecutive months of gains.
Now, we’re gearing up for Fed Chair Jerome Powell’s statement at the virtual Jackson Hole conference tomorrow. It seems like he will be outlining a shift in policy designed to increase inflation.
It was a week ago today that the market reacted negatively to a cautious tone in the Fed minutes, in which Powell warned that the pandemic could impact the economy’s near and medium terms.
So it’ll be interesting to hear what Mr. Powell has to say, but even more interesting to see how this exuberant market reacts.
Today's Portfolio Highlights:
Home Run Investor: It’s always great to find a company with huge EPS estimate increases and a good valuation. Well, that’s exactly what Brian added on Wednesday with Griffon Corporation (GFF). This diversified play has 3 major business lines, including tools & home storage; garage & rolling steel doors; and surveillance & communications products. The company beat earnings expectations in each of the last four quarters with the most recent report surprising by a hefty 391%. The editor was extremely impressed with its margin expansion and the upward estimate revisions for this year and next, which explains why GFF is a Zacks Rank #1 (Strong Buy). It also has a “super cheap” 15x forward earnings and a 2.1x book. Meanwhile, the portfolio sold Meridian Bioscience (VIVO) and The Lovesac Company (LOVE) today with the former bringing in a return of more than 10%. Read the complete commentary for a lot more on these moves. By the way, Dynatrace (DT) advanced 8.75% in the session, which was one of the best performing stocks of the day.
Insider Trader: Who doesn’t like new buys? Tracey wanted some fresh picks in the portfolio, so she added two names on Wednesday. Apple Hospitality (APLE) is a hotel REIT, so it is obviously a recovery play. However, the important thing here is that nearly all of its properties are outside urban areas, which are having a tougher time with this pandemic. This month has seen three insiders pick up shares. The other buy is Coeur Mining (CDE), which operates gold and silver mines in North America. Shares are up 62% over the past year, but that hasn’t stopped a director from buying several times throughout the year, including earlier this month. The editor added APLE and CDE today with about 9% allocations each. She also sold the underperforming Sally Beauty (SBH). Read the full write-up for tons more info on today’s moves.
Large-Cap Trader: There doesn’t have to be a deeper meaning behind every portfolio change. Case in point, John swapped out three positions on Wednesday simply to “put up some new, mostly tech names, and take some tech profits”. He sold Akamai Technologies (AKAM) for a 9.6% return, Microchip Technology (MCHP) for a profit of 5.8%, and Pentair (PNR) brought in 6.3%. The new buys that filled these spots were:
• Applied Materials (AMAT)
• KLA Corp. (KLAC)
• Halliburton (HAL)
All of these stocks are Zacks Rank #2s (Buys). AMAT and KLAC are both chip names that have been in the portfolio before, while HAL is an oilfield services giant that’s a play on the rebounding domestic energy sector. Read the full write-up for a lot more on all of today’s moves.
Surprise Trader: At a time of social distancing, the safest vacations involve activities like camping, fishing and hunting. That’s good news for a company like Sportsman’s Warehouse (SPWH), which is a Zacks Rank #2 (Buy) outdoor sporting goods retailer that hasn’t missed earnings since May 2019. It beat by more than 116% last time and has a positive Earnings ESP of 25.81% for the quarter being reported after the bell on Wednesday, September 2. Expectations of 31 cents suggest year-over-year improvement of more than 138%. Dave added SPWH on Wednesday with a 12.5% allocation, while also selling Autohome (ATHM) for a slight loss. Read the full write-up for more on today’s moves.
All the Best,
Jim Giaquinto
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