The market is still taking a break from last week’s record-setting run, but it managed slight gains in a choppy Tuesday session to get back some of yesterday’s losses.
The NASDAQ rose 0.28% (or 36 points) to 13,072.43. Meanwhile, the Dow advanced 0.19% (or 60 points) to 31,068.69 and the S&P squeaked higher by 0.04% to 3801.19.
Those returns don’t come close to offsetting Monday’s pullback, but it kept the market from its first back-to-back daily losses of 2021.
Stocks had a great start to the year last week, culminating with all three of the major indices hitting new records on Thursday and Friday. Investors are salivating at the idea of all that new stimulus coming into the economy.
But it was time for a breather, which was what we got yesterday with the major indices moving lower led by a 1.25% plunge for the NASDAQ.
It’s also just about time for earnings season as some big banks will be going to the plate later this week. On Friday alone, we’ll be getting reports from JPMorgan (JPM), Citigroup (C), Wells Fargo (WFC) and PNC Financial (PNC).
Today’s Portfolio Highlights:
Stocks Under $10: The oil patch has worked well for the portfolio of late, so Brian increased his exposure on Tuesday by adding Now, Inc. (DNOW). This Zacks Rank #2 (Buy) offers a comprehensive slate of products for the upstream, midstream, and downstream & industrial market segments. The company surpassed the Zacks Consensus Estimate in the past two quarters and is expected to grow earnings by about 50% in 2021. There’s also a low price-to-book multiple of 1.2x. With today’s addition of DNOW, the portfolio is fully invested at 15 names. Read the full write-up for a lot more on today’s addition. In other news, Rayonier Advanced Materials (RYAM) advanced 10.4% in the session, which gave this portfolio one of the biggest winners of the day among all ZU services.
Counterstrike: Despite the NASDAQ hitting new highs recently, Jeremy sees some weakness in tech. He also expects a bit of a selloff heading into earnings season. Such an environment provided the perfect opportunity to short the NASDAQ by adding a 6% allocation in ProShares UltraPro Short QQQ (SQQQ). If FAANG fails to live up to expectations this season, this move could be a great play for the portfolio. In other news, the editor also sold Mohawk Industries (MHK) for a 15.5% profit in about five weeks as the flooring products company hit the service’s targets. See the complete commentary for more on today’s moves. By the way, this portfolio had the top performing stock among all ZU names as Overstock.com (OSTK) soared 16.6%.
Surprise Trader: The portfolio stayed with the financials for another addition on Tuesday, as Dave picked up Goldman Sachs (GS) with a 12.5% allocation. This Zacks Rank #1 (Strong Buy) has beaten the Zacks Consensus Estimate in the past three consecutive quarters, and will be going for a fourth straight when it reports before the bell on Tuesday, January 19. The company has an Earnings ESP of 3.14% for the upcoming release. In other news, the editor also sold Micron (MU) for a slight gain after a “muted” reaction to its report. Read the full write-up for more on these moves.
Healthcare Innovators: You’ve definitely heard about the covid vaccines from Pfizer (PFE) and Moderna (MRNA)… but what about Novavax (NVAX)? This biotech also has a treatment in the testing phases, but its not an mRNA vaccine like the others. Therein lies its potential advantage. The product can be stored at much more moderate temperatures, which means it can be shipped in ready-to-use liquid formulation that can be distributed using standard vaccine supply chain channels. NVAX is now a Zacks Rank #1 (Strong Buy) with a market cap of $7.5 billion. Kevin added the stock on Tuesday and suggests that you add more on a pullback. Make sure to get all the specifics about this new buy in the full write up.
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