Despite a solid earnings season and good economic data, stocks just aren’t feeling it this week. The major indices chopped around on Thursday and finished mixed.
The Dow managed to gain 0.14% in the session to 26,186.7. The NASDAQ, however, declined 0.35% to 7385.9 while the S&P slipped 0.06% to 2822. As of right now, each index is down sharply over the last four days, which leaves the market's four-week winning streak in jeopardy. The main focus at the moment appears to be the threat of higher rates.
"The nervousness some of these folks are having is just overdone. Remember folks, the market doesn’t go up in a straight line every day. Sure we’ve got rates ticking up and there’s always something we can be worried about but that doesn’t mean we should let our emotions cloud our judgment here," said Dave in Momentum Trader and Surprise Trader. "For now we’re getting what I view as typical earnings season chop."
It was a big day for tech reports after the bell. A quick rundown: Amazon (NASDAQ:AMZN) easily beat expectations and are up more than 6.2% after hours; Alphabet (NASDAQ:GOOGL) missed and is off about 2.2% after hours; and Apple (NASDAQ:AAPL) reported disappointing iPhone sales but is up more than 3.3% after hours (all percentages are as of this writing).
Tomorrow is the big Government Employment Situation report. The ADP employment report from earlier this week was very strong and easily surpassed expectations, but that’s not always a good bellwether for what the BLS has to say. With the mood the market is in, you can bet it will judge the report by how it could influence rates.
In the portfolios, TAZR Trader halved two positions and banked a couple of double-digit returns, while Surprise Trader added a semiconductor name that seems poised for a fourth straight positive surprise next week. Also, ETF Investor added a fund from the Aerospace & Defense industry. Learn more about these moves in the highlights section below:
Today's Portfolio Highlights:
TAZR Trader: Kevin doesn’t think a big correction is starting right now, but he does want to take some profits off the table in a strong market where the best of all good news is getting priced-in. Therefore, he sold half of NVIDIA (NASDAQ:NVDA) on Thursday for a nearly 36% profit, marking yet another double-digit return for the portfolio with this “monster of all things advanced computing”.
The editor also halved the position in SMART Global Holdings (SGH) for an 18.33% return. The company is a provider of electronic subsystems to OEMS that was added back in October. Kevin considers it a “mini-Micron” that will follow whichever direction the chips are going. Read the full write-up for more on these moves.
Surprise Trader: On Tuesday before the bell, Vishay Intertechnology (VSH) will be going for its fourth quarterly beat in a row. This Zacks Rank #2 (Buy) semiconductor company surpassed the Zacks Consensus Estimate by more than 10.5% in the previous report and has an Earnings ESP of 6.19% for the one coming up. Dave feels pretty good that this company will continue its success next week. Since he’s been looking for some tech exposure, the editor decided to add VSH on Thursday with a 12.5% allocation. Read the complete commentary for more on this new addition.
ETF Investor: Aerospace & Defense stocks have been doing quite well given President Trump’s plan to boost military spending and North Korea’s ongoing saber-rattling. In the fourth quarter, 87.5% of companies from the space have beaten earnings, while 62.5% of them have beaten revenue estimates. Neena wants in, and so she bought U.S. Aerospace & Defense ETF (ITA) on Thursday. The fund has outperformed of late thanks in large part to its 12% allocation in Boeing (NYSE:BA), which announced an excellent quarterly performance just yesterday. Read the full write-up for more specifics on this new addition
Have a Good Evening,
Jim Giaquinto
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