Another Session of New Highs for the NASDAQ and S&P

Even a rare decline in Apple (AAPL) couldn’t derail the record-setting pace of the NASDAQ and S&P on Tuesday, but the Dow was another story as the index snapped a three-day winning streak.

The NASDAQ may have seen some red in the morning, but it eventually moved higher again and finished with a gain of 0.76% to 11,466.47.

Apple’s five-day winning streak came to an end just a few days before its 4-for-1 stock split, but the rest of the FAANGs did fine. Facebook (FB) even rose by nearly 3.5%, while Amazon (AMZN) and Alphabet (GOOG) each rose by over 1%.

Meanwhile, the S&P advanced 0.36% to 3443.62. Both this index and the NASDAQ had another round of new highs… of course any advance currently makes history for these indices.

Unfortunately, the Dow wasn’t included, though it did come well of the lows of the session and remained above 28K. The index slid 0.21% (or about 60 points) to 28,248.44.

In addition to the decline in Apple, the Dow may have been under a bit of pressure after yesterday’s announcement of a major shake-up due to the iPhone maker’s stock split.

Salesforce (CRM, +3.64%), Amgen (AMGN, +5.37%) and Honeywell (HON, +3.24%) will replace ExxonMobil (XOM, -3.17%), Pfizer (PFE, -1.11%) and Raytheon (RTX, -1.5%), respectively. The changes will be effective before the open on Monday, August 31.
The dropping of XOM is the end of an era, as the oil giant has been in the index longer than any other.

Stocks also had to wade through a disappointing consumer confidence result, but also an ebullient report for newly-built homes that included a 36% surge in July.

And despite the rising tensions between the two countries, it looks like there’s been some progress between the U.S. and China when it comes to working on that Phase 1 trade deal. Remember when that was the big story?

Through the good news and the bad, this market just keeps moving higher for the most part. It’s making some folks nervous. How much longer will this last?

Today's Portfolio Highlights:

Stocks Under $10: With Sangamo Therapeutics (SGMO) sliding to Zacks Rank #4 (Buy) status, Brian thought it was a good time to exit this biotech and take a nice 31% return in a little over three months. The new addition was Lincoln Educational Services (LINC), a leading and diversified for-profit provider of a career-oriented post-secondary education. It’s more of a trade school than anything else, according to the editor, and there’s always going to be a need for skilled labor. The company beat the Zacks Consensus Estimate in the past two quarters, convincing analysts to raise their estimates for this year and next. As a result, LINC is a Zacks Rank #2 (Buy). Brian was also impressed with the steady increase in operating margins over the last three quarters, which should lead to higher EPS moving forward. Read the full write-up for more specifics. 

Counterstrike: The market’s record-setting pace leaves it vulnerable to a significant downside move, according to Jeremy. Therefore, the editor made a couple moves on Tuesday to prepare for the slide. He’s giving ProShares UltraPro Short QQQ (SQQQ) one more chance by adding 5% to the position, which was originally bought in early July. It hasn’t been performing well because the NASDAQ just refuses to move lower, but that's got to change at some point and today's weakness in Apple (AAPL) could mean it's close. Meanwhile, Logitech (LOGI) would be hurt if there’s a tech downturn, so the portfolio sold the stock for a 7.6% return in one month. Read the full write-up for more on today’s moves. 

Commodity Innovators: Crude oil not only avoided breaking lower last week, but it has cleared its 200-day moving average and looks to move even higher. Jeremy thinks the commodity is going to $45 or more. Therefore, he added ProShares Ultra Bloomberg Crude oil (UCO) on Tuesday, which will trade 2X the daily move in crude. He considers this a short-term position. In other news, the editor also sold IPath Series B Bloomberg Coffee Subindex Total Return ETN (JO) for a more than 9% return. Read the full write-up for more.

Zacks Short List: The portfolio swapped out two positions in this week's adjustment. The short-covered stocks were Pinduoduo (PDD, +4.4%) and Tiffany (TIF, +2.6%), while the new buys that filled these open spots were Netflix (NFLX) and Yandex N.V. (YNDX). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Until Tomorrow,
Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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