Stocks Fumble on Friday and Finish Lower for the Week

The market didn’t get the Friday flourish that it needed to stage a comeback and save this volatile week. As a result, the Dow and S&P saw their three-week winning streaks come to an end today.

And the NASDAQ? It now has a two-week losing skid as the once-untouchable tech sector has fallen out of favor and can’t lead the way higher anymore.

The big weight on Friday was chipmaking giant Intel (INTC), which beat second-quarter earnings and revenue expectations but announced a production delay for its next generation chips. The stock plunged 16.2% today.

The NASDAQ saw the biggest loss of the session and the week. It was off 0.94% (or about 98 points) today to 10,363.18, culminating in a decline of 1.4% for the five days. 

Once again, the FAANGs were nothing to write home about, but at least a couple of them managed slight increases. Amazon (AMZN) was up 0.75% and Netflix (NFLX) advanced 0.60%.

Yesterday, EACH of the FAANGs plunged by more than 2%, so we saw a substantial improvement today despite the lackluster results.

Meanwhile, the Dow only needed about 20 points to salvage the week, but that was just too much to ask amid all this uncertainty. Instead the index slumped 0.68% (or about 182 points) to 26469.89. It finished lower by 0.7% for the five days.

The S&P was off 0.62% to 3215.63 and finished the week lower by nearly 0.3%.

The Dow and S&P had been remarkably resilient the previous three weeks amid the tech swoon and the spike in coronavirus cases. But now that earnings season is getting into gear and tensions with China are on the rise, the indices took a step back.

But it was only a small step. The market remains optimistic that we’ll get a vaccine sooner rather than later, though at the same time we're susceptible to any negative headlines.

Today’s pullback was another example of the Friday jitters, which we’ve gotten used to during this shutdown.

Basically, we’re in the midst of a tech slowdown and heading into a week where several of the sector’s heaviest hitters are going to the plate.

How heavy? Amazon (AMZN), Apple (AAPL) and Alphabet (GOOG) will all be reporting after the bell on Thursday, July 30th. That’s three FAANGs in one day!

So let’s rest up this weekend and prepare for a busy end to July. 

Today's Portfolio Highlights:

Counterstrike: It was a busy Friday for this portfolio as Jeremy swapped out two positions. Firstly, he sold Take-Two Interactive (TTWO) and Nice Ltd. (NICE) to secure a couple double-digit returns ahead of their quarterly reports. TTWO brings nearly 14.7% in a little over a month, while NICE profited by more than 11.6% in about two months.

The editor replaced these names with ‘starter’ positions in peripherals leader Logitech Int’l (LOGI) and Rumba vacuum manufacturer iRobot (IRBT). Both of these companies are Zacks Rank #1s (Strong Buys) that recently destroyed earnings estimates with LOGI beating by 77% and IRBT outperforming by 405%. Jeremy added each with 5% allocations today, but would buy more if they continue to move lower despite their solid quarterly reports. Read the full write-up for more on today’s moves, including a look at the charts. By the way, this portfolio's ProShares UltraPro Short QQQ (SQQQ) position was among the top performers today by climbing 2.9%.

Surprise Trader: Internet advertising company Criteo (CRTO) has beaten the Zacks Consensus Estimate for the past 14 straight quarters... and appears to be on track for #15. The stock has a positive Earnings ESP of 317.24% for the quarter coming before the bell on Wednesday, July 29. Dave added CRTO on Friday with a 12.5% allocation. He also sold BancorpSouth Bank (BXS) for a 3% return in about 11 days. Read the full write-up for more.

Blockchain Innovators: What a crazy day for the chip space. On the one hand, industry leader Intel plunged more than 16%. However, main rival Advanced Micro Devices (AMD) soared by 16.5%! As a result, this portfolio easily had the best performer of the day. In fact, the advance was five times better than the next best performer among all the ZU services. AMD is also the biggest winner in this portfolio with a gain of more than 326% since being added two years ago. The company reports after the bell on Tuesday, July 28.

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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