Market Plunges More Than 2% While Waiting for Apple, Facebook

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We saw our first significant selloff of 2021 on Wednesday, as investors waited for a couple big FAANG reports and marveled at the continuing squeeze-a-palooza.

The NASDAQ plunged 2.61% (or approximately 355 points) to 13,270.60. Also, the S&P was off 2.57% to 3750.77, while the Dow slipped 2.05% (or about 633 points) to 30,303.17 for its fifth straight day of losses.

Apple (AAPL) and Facebook (NASDAQ:FB) joined in the sour trading by declining 0.77% and 3.51%, respectively, after each soared more than 10% in the previous week-and-a-half. The market was waiting for their quarterly reports after the bell.

AAPL and FB both beat expectations on the top and bottom lines following the close, though the latter company did warn that revenue growth for its advertising business could come under pressure moving forward.

As of this writing, AAPL is down about 1.9% after hours, while FB is up more than 1%. Also, Tesla (NASDAQ:TSLA) is off about 2.9% after missing earnings estimates.

Meanwhile, heavily-shorted stocks continued getting squeezed on Wednesday, leading to another round of epic gains while investors wonder if we’ve reached a top and are poised for a sharp pullback.

The stock getting most of the attention is video game retailer GameStop (NYSE:GME), which soared another 135% today on top of Tuesday’s 92.7% surge.

But there are plenty of other names being squeezed right now, including AMC Entertainment (NYSE:AMC, +301.2%), Express (EXPR, +214.1%), Bed Bath & Beyond (BBBY, +43.5%), and many others.

For more specifics on what’s happening out there, make sure to read “WallStreetBets: The Big Short-Squeeze” by Daniel Laboe, editor of our new service Headline Trader debuting in early February.

And as far as more predictable news is concerned, the Fed concluded its two-day policy meeting on Wednesday and kept rates unchanged near zero.

The NASDAQ recently set new records in four consecutive sessions, so a break isn’t very surprising. As the editors often say, such declines are necessary and healthy for the market. Is there more selling to come? Let’s see what happens tomorrow.

Today's Portfolio Highlights:

Home Run Investor: After a huge 94% positive surprise in its most recent report, earnings estimates for Everi Holdings (NYSE:EVRI) have risen sharply enough to make the stock a Zacks Rank #2 (Buy). The company services the casino industry with things like slots, payment solutions and even some lottery sales. Brian likes the earnings beat, but he loves that analysts expect EVRI to return to profitability in 2021. Moving forward, this name will benefit from the vaccine rollout, while its margins turning positive will mean big things for the stock price. The editor added EVRI on Wednesday, while also selling Sterling Construction (NASDAQ:STRL) for an approximately 7% return in about five weeks. Read the full write-up for more on today’s action.

Surprise Trader: The portfolio traded oil for water on Wednesday, as Dave sold the slumping oilfield services company Schlumberger (NYSE:SLB) and added Evoqua Water Technologies (NYSE:AQUA). The new addition provides mission critical water treatment solutions. It has an excellent record of eclipsing the Zacks Consensus Estimate, including a beat of nearly 32% last time. And now it has a positive Earnings ESP of 47% for the quarter coming before the bell on Tuesday, February 2. The editor added AQUA today with a 12.5% allocation. Read the complete commentary for more on today’s moves.

Counterstrike: We’re getting closer to the upside capitulation for this speculative buying, according to Jeremy. But we’re not there yet! BlackBerry (NYSE:BB) soared yet again on Wednesday, and the editor thinks it can go a lot higher. Therefore, he sold half of BB again for a gain of more than 232% and will hold onto the rest for further jumps during this crazy price action. This marks the second time THIS WEEK that Jeremy pulled a triple-digit profit out of BB, as he sold half of the original BB position on Monday for more than 150%. Make sure to read the complete commentary for the editor’s take on this unique market situation.

All the Best,
Jim Giaquinto