NASDAQ Closes Above 11,000 and at Another New Record

Stocks overcame some morning sluggishness on Thursday and posted another session in the green, which included a new milestone for the NASDAQ.

A big reason for the market’s second-half momentum today was this week’s better-than-expected jobless claims report, which showed that nearly 1.19 million people filed.

While that marks 20 weeks above 1 million, it’s also the lowest level since the pandemic began.

Perhaps most importantly, the reading breaks back-to-back weeks of increasing claims and also easily topped expectations of over 1.4 million.

The number comes after yesterday’s disappointing ADP report that drastically missed expectations, but before tomorrow’s all important government employment situation.

After digesting the news for a while, stocks moved sharply higher in the second half to keep this strong start to August intact. And the leader should come as no surprise.

The NASDAQ jumped by 1% (or nearly 110 points) to 11,108.07. That’s the index’s first ever close above 11,000 and its fourth straight day with a closing high. It also marks 7 consecutive days of gains.  

It was a good session for the FAANGs as they all moved higher, led by Facebook (FB, +6.49%) and Apple (AAPL, +3.49%).

Netflix (NFLX) and Alphabet (GOOG) advanced by more than 1% each. And good old Microsoft (MSFT) joined in with a rise of 1.6%.

The S&P rose 0.64% to 3349.16 and the Dow advanced 0.68% (or about 185 points) to 27,386.98. These indices both have 5-day winning streaks now.

It feels like the market may be getting a little unnerved by the delay of a coronavirus relief package. Missing the expiration of the old benefits is just par for the course with Congress, but now we’re getting close to a week without a plan.

The market has been taking it in stride so far because a deal is inevitable, but patience could be lost quickly with Washington in the midst of a financial emergency.

No one knows if there will be any progress on a plan tomorrow, but we do know that the government employment situation is being released.

The report is coming off two epic months of outperformance, but July saw stalled reopenings in the face of a rise in coronavirus cases.

The economy is expected to have added a bit more than 1.2 million jobs last month. If the number beats and there are no setbacks on Capitol Hill, then we may be able to rally out this week and have a really strong start to August.

Today's Portfolio Highlights:

Insider Trader: The portfolio made several moves on Thursday as insider activity is on the rise. Firstly, Tracey sold her volatile Tutor Perini (TPC) position to secure a nice 22.9% return in a little over two months. Meanwhile, Old Republic (ORI) was also sold after failing to gain any momentum. The editor then added the following three names:  

• Quidel (QDEL) – a diagnostic testing company that’s soared 273% year-to-date, yet still saw a director buy 3500 shares on Monday.

• Wabtec (WAB) – an equipment and digital solutions company for the rail industry that had a director buy 5000 shares on Monday.

• Sally Beauty (SBH) – a global beauty products company that enjoyed a cluster buy earlier this week with the CEO and two directors picking up shares.

Tracey is adding these names with 10% allocations each. Read the full write-up for a lot more on today’s moves.

Surprise Trader: For the second time this week, Dave added a name from the cosmetics industry. On Thursday, he picked up Inter Parfums (IPAR), which makes a wide range of fragrances and related products. The editor likes this company’s exposure to Europe, where it gets more than 70% of its sales. IPAR has beaten the Zacks Consensus Estimate in 15 of the past 16 quarters, and has a very healthy Earnings ESP of 30.26% for the quarter coming after the bell on Monday, August 10. It topped expectations by more than 10% last time. The portfolio added IPAR today with a 10% allocation, while selling its underperforming ArcBest (ARCB) position. Read the full write-up for more.

Technology Innovators: Satellite names are doing really good right now, so Brian decided to add Iridium Communications (IRDM) on Thursday. The company has beaten expectations in each of the last four quarters with an average surprise of 30%. Rising earnings estimates have made this stock a Zacks Rank #2 (Buy). The editor especially likes that margins are taking big steps in the right direction. The portfolio also sold MACOM Technology Solutions (MTSI) for a 35.25% return in three months and Silicon Motion Technology (SIMO) for a loss. Read the full write-up for more on today’s action.

Stocks Under $10: This portfolio had the top two performers of the day among all ZU names. The biggest winner was Digital Turbine (APPS), which just reported fiscal first quarter results that included an earnings surprise of more than 44% and year-over-year earnings growth of 160%. Meanwhile, revenues topped expectations by nearly 23% and improved by over 93% from last year. The stock was up 30.57% on Thursday. And Maxar Technologies (MAXR) wasn’t too far behind with a rise of 20.69% after its own quarterly report.

All the Best,
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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