Single-Minded Market Snaps Weekly Winning Streaks

This week was all about the stimulus deal, so, since we still don’t have one, it makes complete sense that the market would move lower over these five days.

It’s just too bad that the winning streaks for the major indices had to come to an end while Washington decides what to do. However, stocks are still solidly higher for October heading into the final days of the month.

It’s been pretty much the same thing all week from the Capitol Hill bigwigs: “We’re making progress on a deal, but big issues remain unresolved”.

After hearing variations of that EVERYDAY and still having nothing to show for it, the Dow and NASDAQ each slipped by approximately 1% this week. The S&P did a little better by declining only 0.5%.

However, the NASDAQ’s four-week winning streak is history, as is the S&P and Dow’s three week runs. Stocks plunged by well over 1% on Monday and were never able to recover.

For Friday, the market ended mixed. The NASDAQ managed to advance 0.37% (or about 42 points) to 11,548.28, while the S&P rose 0.34% to 3465.39. However the Dow declined 0.10% (or around 28 points) to 28,335.57.

Earnings season has done rather well so far with the earnings outlook continuing to improve. (Make sure to read Sheraz Mian’s “Exploring the Improving Q3 Earnings Picture” for more.)

However, don’t tell Intel (INTC) that things are looking better, because the chipmaker plunged over 10.5% on Friday after its quarterly report. The company beat expectations on the top and bottom lines, but investors didn’t care for a slip in its data center chip sales.

Next week’s busy slate of earnings will be dominated by technology. Thursday will most definitely be FAANG day as Apple (AAPL), Facebook (FB), Amazon (AMZN) and Alphabet (GOOG) are all scheduled to report.  

Netflix (NFLX) was the first FAANG to go to the plate on Tuesday, but the streaming giant disappointed investors with lower subscriber additions. However, it finally finished in the green on Friday by 0.63%.

Microsoft (MSFT) and Advanced Micro Devices (AMD) will also be going to the plate.

So rest up over the weekend, because things are going to get a lot busier with nearly 1200 companies reporting next week...

Today's Portfolio Highlights:

Surprise Trader: You know what’s NOT a surprise right now? That the retail – mail order space is in the top 2% of the Zacks Industry Rank. But even before the pandemic, 1 800 (FLWS) knew how to make e-commerce work and didn’t have to shift gears when the trouble started. The online flower company has beaten for nine straight quarters and looks poised to make it 10. This Zacks Rank #1 (Strong Buy) has a positive Earnings ESP of 4.35% for the quarter coming before the bell on Thursday, October 29. Dave added FLWS on Friday with an 11.1% allocation, while also selling the underperforming Winnebago (WGO) position. Read the full write-up for more. By the way, this portfolio had a top performer today as Altra Industrial Motion (AIMC) jumped 10.8%.  

Stocks Under $10: Lower overall volumes have increased the risk out there, so Brian decided to reduce exposure among all his services on Friday. One of today’s sells was Digital Turbine (APPS), which became a fixture on the daily top performers list. The company was added back in late April and leaves today with an impressive return of more than 475%! The editor also sold Invacare Corp. (IVC), Cerus Corp. (CERS) and Hecla Mining (HL) for slight losses. There'll be a new addition on Tuesday. Speaking of top performers, this portfolio had the #1 spot today as toymaker Funko (FNKO) rose 13.2%.

Home Run Investor: As part of his above-mentioned reorganizations, Brian sold five names in this portfolio on Friday and cashed in three positions. The biggest winner was enterprise software company Domo (DOMO), which brought a return of 63.9% in a little over five months. Also, Hibbett Sports (HIBB) was sold for a 10.5% profit in less than a month, while Commercial Metals (CMC) brought a gain of 2.8% in just under three months. Perficient (PRFT) and Genpact Ltd. (G) were also sold for losses. Get ready for a new addition on Wednesday.

Counterstrike: "We should get some clarity this weekend on stimulus, which could lead to a big gap up or down Sunday night. I have no idea what's going to happen, but it seems like this will be impossible to pass before the election.

"Either way I think stimulus is just a short-term roadblock. The election will just determine who gets their way in how the stimulus is designed. This has been exhausting to trade, write about and I'm sure read about. The market just needs a 'No' or a 'Yes' to make a move. Let's hope we can get that answer next week."
-- Jeremy Mullin  

Have a Great Weekend!
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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