SPECIAL ALERT: The November episode of the Zacks Ultimate Strategy Session is now available for viewing! Tune in to this "must-see" event when Kevin Matras, Dr. John Blank, David Bartosiak and Sheraz Mian discuss the investment landscape from several angles.
Don't miss your chance to hear:
▪ Sheraz and David Agree to Disagree on the sectors best positioned to perform in 2021 and beyond
▪ Kevin discusses what investors should do now that the election is over in Zacks Mailbag
▪ Sheraz and John choose one portfolio to give feedback for improvement
▪ And much more
Simply log on to Zacks.com and view the November episode here. And please let us know what you think of this format. Email all feedback to mailbag@zacks.com.
The NASDAQ recouped most of its recent losses on Wednesday, as the two-day rotation out of tech paused and the Dow finally took a break.
The market has been a different place since news of a vaccine that’s reportedly more than 90% effective at preventing covid. Money surged into recovery names on Monday and Tuesday.
But you can’t keep tech down for long!
The NASDAQ jumped 2.01% (or about 232 points) on Wednesday to 11,786.43. The index had lost nearly 3% in the previous two sessions, so it got about two-thirds of the way back.
The FAANGs were all higher, led by more than 3% advances for Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) each. Netflix (NASDAQ:NFLX) increased more than 2% and Facebook (NASDAQ:FB) rose 1.5%.
The S&P was up 0.77% to 3572.66, but the Dow declined 0.08% (or around 23 points) to 29,397.63.
The loss ended a two-day winning run for the Dow, which may not seem too impressive until you realize that it soared just under 1100 points in those two days.
The market was so impressed with the vaccine news that it focused on names set to take off once we get back to normal, such as airlines, cruise companies, hotels, etc.
However, we’re not back to normal just yet. In fact, we’re still dealing with rising coronavirus cases and the threat of lockdowns.
Meanwhile, you know what’s taken a backseat amid all the vaccine hopes and election results? Earnings season! And that’s too bad, because its been a pretty good ride.
More than 90% of S&P companies have reported Q3 results. Over 84% of them beat earnings expectations, while more than 75% topped revenue estimates.
“The earnings outlook has been steadily improving since early July, as the U.S. economy started coming out of the pandemic-driven slump,” said Sheraz Mian in his Earnings Trends article posted today.
“While pockets of entrenched weakness remain, the pace and magnitude of the recovery has largely been better than expected.”
Make sure to read his complete article titled: “Handicapping the Improving Earnings Picture”.
Today's Portfolio Highlights:
Options Trader: In addition to beating earnings by 20% in its most recent report. Arthur J. Gallagher (AJG) has also broken out of a bullish consolidation pattern. Kevin expects more upside to come from this Zacks Rank #1 (Strong Buy) provider of insurance brokerage, consulting services, and third-party claims settlement and administration services. On Wednesday, the editor bought to open two April 120.00 Calls. Get more specifics in the full write-up.
Home Run Investor: Stocks in the building products space continue to move higher, so that’s where Brian went for today’s addition. The editor picked up Construction Partners (NASDAQ:ROAD), an infrastructure & road construction company that beat the Zacks Consensus Estimate by 25% in its most recent report. Rising earnings estimates have made the stock a Zacks Rank #2 (Buy). If ROAD can keep the earnings momentum going, Brian thinks the stock could move a lot higher. Meanwhile, the portfolio also sold Brown & Brown (NYSE:BRO, +3.8%) and Meridian Bioscience (NASDAQ:VIVO) on Wednesday. Read the full write-up for more on all of today’s moves.
Surprise Trader: Earnings estimates for Teekay LNG Partners (NYSE:TGP) are on the rise, but the stock has been giving up ground. Dave doesn’t mind such a divergence, since it gives the share price plenty of running room moving forward. The company has a positive Earnings ESP of 10.71% for the quarter coming before the bell tomorrow, which makes this one of the editor’s “quick turnaround” ideas. He also appreciates that the company is a big dividend payer with a yield over 8%. The portfolio added TGP on Wednesday with a 12.5% allocation, while also getting out of Wolverine World Wide (NYSE:WWW). The complete commentary has more on today’s action.
Commodity Innovators: With the market rallying sharply so far in November, Jeremy sees the potential for pullbacks in certain areas. Therefore, he took profits in three names on Wednesday. The biggest winner was premier specialty chemicals provider Albemarle Corporation (NYSE:ALB), which ran beyond the portfolio’s targets. It was sold today for a 26.7% return in a little over two months. The editor would be willing to re-enter on any pullbacks. The other sells on Wednesday were Teucrium Soybean ETF (SOYB) for a 10% return in about six weeks and iShares Silver Trust (NYSE:SLV) for a 5.8% profit in approximately the same amount of time. Read more in the full write-up.
Until Tomorrow,
Jim Giaquinto
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