The market didn’t have any energy in this lazy summer session, which left each of the major indices little changed on Friday. However, they still managed weekly gains.
The Dow significantly outperformed its counterparts over the past five days by rising 1.8%. The S&P rose a little more than 0.6%, while the NASDAQ barely stayed positive this week by advancing .08%. It only advanced 8 points since last Friday’s close.
The big news of late has been the S&P, which spent the whole week attempting to close at a new high. The index broke through the Feb 19 record at 3386.15 a few times, but it just couldn’t stay above the mark.
It closed lower by 0.02% on Friday to 3372.85. Given such a small decline, it remains a little more than 13 points away from making history. So this will likely be a big story again next week.
The NASDAQ slid 0.21% (or about 23 points) to 11019.30 as tech was as lazy as everything else today. The only FAANG with a positive close was Netflix (NFLX, +0.28%).
The Dow stood alone in the green today, which underscored its strong weekly advance. However, the index was only higher by 0.12% (or about 34 points) to 27,931.02.
Retail sales were a mixed bag, as an advance of 1.2% was only about half of expectations. But if you stripped out auto, the rise of 1.9% easily topped forecasts.
The market is still feeling pretty good about yesterday’s jobless claims report, which came in below 1 million for the first time in 20 weeks. That’s a covid era milestone.
Unfortunately, there’s no good news when it comes to coronavirus relief. Congress actually went home… without a deal! They won’t be back in town until around Labor Day.
Hey, what can you say? It’s Washington.
A few of the editors have mentioned that these slow summer sessions of late have made the market feel more normal… and ‘normal’ is in short supply these days.
Let’s hope we can stay calm and mostly optimistic until a vaccine really gets us back on track.
Today's Portfolio Highlights:
Blockchain Innovators: The earnings trend for International Money Express (IMXI) has “strengthened considerably” since the last time this fintech company was in the portfolio. Dave added this name last year because it utilized blockchain technology early on in its payments business. The stock didn’t do much for the service back then, but the editor thinks it will be different this time. IMXI is now a Zacks Rank #1 (Strong Buy) with year-over-year growth of 18.75% expected this quarter and 38.89% for next. Meanwhile, Dave also sold SecureWorks (SCWX) for a small gain. Read the full write-up for more. In other news, this portfolio also had the top two performers of the day among all ZU services with Net Element (NETE, +10.56%) and WISeKEY International (WKEY, +7.89%).
Counterstrike: "Another slow day in the markets, with low volume and tight ranges. It is what we should expect on a Friday in August, but considering what we have been used to, it is hard to adjust. Talking to some traders, it was a tough week of adjustment and today was a session most of us should take off or just watch.
"Don’t get me wrong, there is money out there. Tesla is one of the best day trading stocks ever created and continues to be a worthwhile play. Stocks like Apple, Amazon and Nvidia also give a lot of opportunity to make money every day. However, if you are a swing trader, or venture outside the big stocks, it can be difficult in this environment.
"Summer is a time of low volatility and with the VIX at 22 it’s a hard adjustment after a few months above 30. If you struggled over the last few weeks, look at next week as an opportunity to adjust.
"The S&P closed up about half a percent on the week, with the low at 3326 and the high was 3387. I thought the rug would be pulled this week, but that was wrong. Now it seems like a push higher is inevitable and perhaps we get that next week." — Jeremy Mullin
Value Investor: "The weekly jobless claims fell under 1 million for the first time since the pandemic started last week. That's a good sign as it's fewer people filing for new claims.
"We need to continue to see the numbers drop, week over week, in order for a true recovery to be underway.
"The stock market will keep rallying on the "recovery" trade as long as it's really happening. We'll see what happens over the next several weeks.
"Remember, our mantra is still "don't fight the Fed or the Congress."
"They WILL do another aid package. It's just a matter of when." — Tracey Ryniec
Have a Great Weekend!
Jim Giaquinto
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