Today’s session was a flipped image of yesterday’s, as the more economically-sensitive names came to the forefront while tech took a step back.
The Dow led the way with a gain of 0.60% (or nearly 160 points) to 26,840.40. On Monday, the index fought back from a triple-digit deficit to just barely sneak in with a gain of 0.03%.
The S&P, which turned positive for 2020 yesterday, rose another 0.17% to 3257.30. This index and the Dow both pulled back rather sharply late in the session.
But the NASDAQ saw the biggest change from the previous day as it slipped 0.81% (or about 86 points) to 10680.36. This comes just 24 hours after soaring approximately 2.5%.
ALL of the FAANGs were lower on Tuesday with only Alphabet (GOOG) managing to keep its loss under 1%, while Netflix (NFLX, -2.45%) still seems to be smarting from its disappointing report last week.
The market can be very finicky these days considering all the craziness right now, especially the rise in coronavirus cases, the updates on vaccine candidates and, of course, the results of earnings season.
Sometimes investors feel like tech, and sometimes they want ‘reopening’ names. On Tuesday, it was more the latter, especially since we’ll be hearing a lot more about another round of stimulus moving forward as federal benefits will soon expire.
Speaking of tech again, a BIG earnings report from the space is scheduled for tomorrow with Microsoft (MSFT) going to the plate after the closing bell.
The stock was down 1.35% today compared to a gain of more than 4% yesterday, showing another example of this topsy-turvy market over the past two days.
Investors will also be interested to see what Tesla (TSLA) says in its report tomorrow.
Today’s Portfolio Highlights:
Surprise Trader: Shares of Herc Holdings (HRI) soared into the mid-$30s after beating the Zacks Consensus Estimate by nearly 115% in its last report. This equipment rentals business remains at that level and had another good session today (up 5.8%). Dave thinks there’s more to come. The stock has an Earnings ESP of 45.34% for the quarter coming before the bell this Thursday, July 23. The editor added HRI on Tuesday with an 11.5% allocation, which was all the remaining cash after selling the rest of SYNNEX (SNX) to make room. SNX brought a return of almost 18.4% in just under a month. Dave sold the first half last week, which brought in double digits as well. Read the full write-up for more on today’s action.
Stocks Under $10: The portfolio has a few open slots to fill, and Brian isn’t going to wait around for a pullback. He wasted no time in adding U.S. Xpress Enterprises (USX), a Zacks Rank #2 (Buy) provider of transportation services. The company has a “wonderful chart” and beat the Zacks Consensus Estimate in the past two quarters. The service also sold Redhill Biopharma (RDHL) today. Read the full write-up for more. This portfolio also had one of the top performers of the day wtih Solaris Oilfield Infrastructure (SOI) rising 9%.
Zacks Short List: The portfolio replaced four names in this week’s adjustment. The short-covered stocks included:
• V.F. Corp. (VFC)
• Tiffany (TIF)
• StoneCo (STNE)
• Sunrun (RUN)
The new buys that filled these opened spots were:
• Advanced Disposal Services (ADSW)
• Incyte (INCY)
• Las Vegas Sands (LVS)
• Nike (NKE)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Counterstrike: “Earnings should change the atmosphere as we get a better picture of how the lockdowns hit corporations last quarter. So far, earnings have been right around what investors have expected, but the price reaction has been muted. There will be big winners and losers in the coming weeks so don’t be shocked if we see big moves in individual names.
“Whether earnings collectively move the overall market is in question. While big names might force the market up in down any given day, we could see the buyers step in on every dip. The Fed has the bull’s backs and they know it. All-time highs in the S&P is a goal for the bulls and as of now I fully expect them to hit it.
“Big earnings coming the next couple days. While we may not be active at the moment, the first couple weeks of August will likely give us a lot of action.” — Jeremy Mullin
Insider Trader: “We’re starting to see better-than-expected earnings reports trickling in. While Q2 was horrible, as expected, it wasn’t as bad as most thought.
“But many companies still can’t give guidance due to the uncertainty. Just as business started to improve in the quarter, these outbreaks have hit business again. They just don’t know what’s going to happen next.
“The stock market is waiting to see what is going to happen with the next stimulus/disaster aid package out of Washington.
“This is still a headline driven market and the bulls are still mostly betting on the reopening story.” — Tracey Ryniec
Have a Great Evening,
Jim Giaquinto
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