NASDAQ Survives Late Selloff and Sets Another New High

·4-min read

After two days of gains to start the week, the market settled into a more normal summer session on Wednesday with low volume. But we still have a new high to boast about as the NASDAQ eked out a tiny gain, which marks back-to-back record closes.

The index rose 0.13% (or more than 18 points) to a fresh milestone of 14,271.73, as tech is back in the good graces of investors. But the other major indices got caught up in a late selloff. The S&P came into this session just 0.2% away from its own high, but finished lower by 0.11% to 4241.84. The Dow declined 0.21% (or about 71 points) to 33,874.24.

To be fair though, the gains weren’t that great to begin with. The market continues to live on the words of Fed Chair Powell and other Committee members. In front of the House Select Subcommittee on the Coronavirus Crises yesterday, he reiterated that the comeback has been very strong but has further to go. And more importantly, he’s sticking to the idea that rising inflation will only be transitory.

The market liked this update a lot more than last Wednesday’s Fed announcement, when the inflation expectation was significantly raised and the timeframe for a rate hike was moved up to 2023.

“Not really a lot to say today as there was little news and very little action,” said Jeremy Mullin in Counterstrike. “Things are slowing down again after that op-ex week shook things up. As I said above, I’m having issues finding our traditional setups, so focusing on our current holdings for now. Looking to book some profits in the coming weeks and raise cash for what should be a volatile earnings season.”

Tomorrow brings a new jobless claims report. Last week’s number was a bit on the disappointing side, as the 412K result missed expectations and snapped a six-week streak of improvements. Coming a day after the Fed announcement, this print probably contributed to last week’s losses.

But this week has seen a nice comeback. We’re now past the halfway point and the major indices are all solidly higher (thanks in large part to a strong rally on Monday). Let’s see what happens tomorrow...

Today's Portfolio Highlights:

Home Run Investor: Earlier this week, the portfolio sold two names and added one. That means there’s an open spot in the service, which Brian filled on Wednesday by adding Harrow Health (HROW). This medical services play owns a portfolio of healthcare businesses, including 2M shares of ETON, a 30% stake in Surface Ophthalmics and a 44% stake in Melt Pharmaceuticals. This Zacks Rank #2 (Buy) has beaten the Zacks Consensus Estimate in three of the past four quarters, including a positive surprise of 120% most recently. The editor is most excited about topline growth expectations of 680% for next year! And that’s after topline growth of 61% this year. Moving forward, the key will be maintaining positive margins during this monster growth... and it just so happens that operating margins moved to 4.24% in the most recent quarter. Read the full write-up for a lot more on this new addition.

Counterstrike: The portfolio added 4% more to Ulta Beauty (ULTA) and Grayscale Bitcoin Trust (GBTC) each on Wednesday. The Zacks Rank #1 (Strong Buy) beauty products retailer is holding up technically and looks like it will get to Jeremy’s $340-$345 buy zone. So he added it a little early today and is setting up a stop. Meanwhile, the drop in Bitcoin provided a great opportunity to add more GBTC, especially since the $30K level held and the bounce back was “pretty bullish”. The editor likes the setup and put a stop at the recent low for the stock. Read the full write-up for more specifics on these moves.

Blockchain Innovators: This portfolio had the two best performers among all ZU names on Wednesday. Those strong performances came from Perion Network (PERI, +15%) and Exp World Holdings (EXPI, +7.6%).

All the Best,
Jim Giaquinto

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