NASDAQ Back at Record High, while S&P Takes a Breather

The NASDAQ and S&P traded places on Thursday, as the tech-heavy index managed a new closing high while the broader one took a break after two sessions of records.

The NASDAQ advanced 0.23% (or nearly 28 points) to make history at 12,377.18. The Dow rose 0.29% (or around 85 points) to 29,969.52.

The S&P, though, took a tiny step back with a dip of 0.06% to 3666.72. The index had reached a new intraday high, but a late selloff ruined the momentum.

The final-hour stumble was due to news that Pfizer (PFE) was having supply chain issues that would halve its vaccine shipments this year. But the company will make up for it next year, so it wasn’t the earthquake that it could have been.

However, it is a reminder to a very optimistic market that there could be hiccups along the way in inoculating the public and getting back to normal.

Speaking of hiccups, there were reports today that Speaker Pelosi and Senate Majority Leader Mitch McConnell had spoken and might get back to stimulus talks this month.
That’s certainly more consequential than yesterday’s “big” news of Pelosi and Senate Minority Leader Schumer, both Democrats, agreeing on the recent bipartisan plan. Though its been burned before, the market can’t help but be hopeful that a stimulus deal could be near.

Jobless claims last week came in at 712,000, which was better than the 780K that was expected. Perhaps more importantly, the number gets this report moving in the right direction again after two consecutive weeks of misses.

But when it comes to jobs, the main event will be the Government Employment Situation tomorrow. Expectations are for around 500K jobs being added, which would be less than the previous month’s surge.

Finally, the ISM Services Index came in at 55.9 for November, barely missing the consensus of 56 and down about 0.7 from the previous month. However, it remains solidly in expansion territory (over 50) and marks six straight months of growth.

Stocks head into Friday with gains for the week. The NASDAQ is up more than 1% over these four days, while the S&P has advanced 0.8%. The Dow is hanging on with a 0.2% increase.

Today’s Portfolio Highlights:

ETF Investor: Going to the doctor’s office for routine care was never something that people looked forward to doing… and now they really don’t have to! The coronavirus has been a “game-changer” for telemedicine, and there’s a fund that can help you capitalize on this new dynamic. The Global X Telemedicine & Digital Health ETF (EDOC) invests in global health companies with high exposure to telemedicine & digital health. It’s a play on what’s expected to be a long-term paradigm shift in health care toward digitization. Since its launch four months ago, EDOC has already gathered more than $486 million in assets. Neena wants to be part of this shift, so she added EDOC on Thursday. The editor also sold Amplify BlackSwan Growth & Treasury Core ETF (SWAN), which was a “safety trade” that brings nearly 12% to the portfolio in about nine months. Read the full write-up for more.

Blockchain Innovators: After years of downside action in earnings, ADTRAN (ADTN) has finally turned the corner. And its price movement has come along for the ride. ADTN designs, manufactures, markets and services network access solutions for communication networks. Or as Dave puts it: “This is the sort of company that provides the backdrop necessary for cloud-based technologies and blockchain.” Revenue and earnings growth look good moving forward, so the editor decided to add this Zacks Rank #2 (Buy) as it continues to move higher. See the complete commentary for more on this new addition. By the way, this portfolio had a top performer today as Brightcove (BCOV) rose 8.5%.

Counterstrike: As promised, the portfolio “spiced things up” on Thursday with several moves, including a buy, a short and a couple sells. First of all, Jeremy added Mohawk Industries (MHK) with a 5% allocation. This Zacks Rank #2 (Buy) is a manufacturer of flooring products that reported a 41% surprise last month. The service’s short-term target is $145 while the longer term is even higher, so the editor may add more to this “half position” moving forward.

The portfolio also short sold Beyond Meat (BYND), the Zacks Rank #4 (Sell) plant-based meats company. The stock recovered a bit from plunging after its “disastrous quarter” in early November. But Jeremy doesn’t think the slide is over and believes it could have a double-digit pullback. He shorted BYND with a 5% allocation. Meanwhile, Zebra Technologies (ZBRA) was sold for a 48.6% return in less than three months, while a fourth of Turtle Beach (HEAR) was sold for 15.6% in less than six months. Read the full write-up for more.

TAZR Trader: What a great fiscal second quarter for Elastic (ESTC)! The search company registered a narrower-than-expected loss, a double-digit revenue beat and even a raised guidance for fiscal 2021. However, the analysts weren’t as excited as Kevin would have thought… and it didn’t help that big-data peer Splunk (SPLK) plunged today. Therefore, the editor sold half of ESTC on Thursday for a return of approximately 34.3% in less than three months. Read the full write-up for analyst reactions and a bright spot of news that many have missed. 

Commodity Innovators: The portfolio traded in meats for metals on Thursday. Jeremy sold IPath Series B Bloomberg Livestock Subindex Total Return ETF (COW) for a 9.5% return in just under six months as new restrictions due to the rise in coronavirus cases has pretty much ended the momentum in restaurants. The new buy is Direxion Daily Junior Gold Miners Index Bull 2X Shares (JNUG), which tracks the performance of small and midcap gold and silver mining companies. This move will help the service take advantage of rising gold prices, which the editor thinks will continue into early 2021. Therefore, he considers JNUG to be a short-term trade. Get more specifics in the full write-up.

Insider Trader: Shares of Arlo Technologies (ARLO) have been jumping since a set of cameras from this smart home technology company was featured on Apple’s website. In fact, the stock was the top performer of the day among all ZU names on Thursday! Tracey wants to secure some of that profit before the next pullback, so she sold half of ARLO on Thursday for a profit of more than 29%. The editor first added this name on November 20, and it has quickly become the #1 performer in the portfolio. She’s going to let the rest of the position run and see how high it can get.

Have a Good Evening,
Jim Giaquinto

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