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Dow, S&P Drop Over 1% on Second Straight Day of Losses

Jim Giaquinto
·5 min read
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Stocks slipped for a second straight session on Wednesday as investors paid more attention to the current impact of rising coronavirus cases than the future possibilities of the Covid vaccines.   

Here’s the situation:  a vaccine is still months away, while the next wave is happening RIGHT NOW. As was said yesterday, the market is stuck in the middle of short-term problems and longer-term hopes.

Today, those short-term problems won out as each of the major indices added onto Tuesday’s pullback.

Stocks have been under pressure ever since the Dow and S&P reached all-time highs on Monday. So it’s rather fitting that these indices each lost 1.16% on Wednesday.  

The S&P is now at 3567.79, while the Dow slumped approximately 344 points to 29,438.42. Meanwhile, the NASDAQ lost 0.82% (or about 97 points) to 11,801.60.

They all saw green momentarily today, but finished near session lows. It’s the first time this month that the major indices all had back-to-back losing sessions at the same time.

Nevertheless, the market remains solidly higher so far in November.

The positive vaccine data continued as Pfizer (PFE) and partner BioNTech said their treatment was actually 95% effective at preventing Covid, according to Phase 3 trials.

That’s about 5% better than the first reading on November 9 and puts it in the same ballpark as Moderna’s (MRNA) vaccine with its 94% effectiveness.

However, this already feels like old hat right about now.

Instead, the market is concerned about the rising number of cases and the new restrictions being implemented, especially today’s announcement that NYC public schools would go back to remote learning to try and slow down the spike.

The lack of a stimulus package can really be felt right about now. If Washington had passed something, then the market could be more at ease while weathering this storm and waiting for the vaccines.

Today's Portfolio Highlights:

Home Run Investor: As a new Floridian, Brian can see firsthand that the market for boats is “red hot”. And recent results from MarineMax (HZO) provide proof. This boat equipment & sales firm beat the Zacks Consensus Estimate in each of the last four quarters. The most recent surprise was a hefty 190%. Rising earnings estimates have made the stock a Zacks Rank #1 (Strong Buy). Plus, the editor “loves” its valuation and appreciates that its thin margins are moving higher. He wouldn’t be surprised if the stock doubles over the next year, so HZO was added to the service on Wednesday. See the full write-up for more specifics. 

Options Trader: Just about a month ago now, Kevin added a call in Visteon (VC) because the automotive industry was on an upswing. How much of an upswing? The editor sold to close that March 95.00 Call on Wednesday for a return of more than 202%! And as he likes to do after a premium is doubled or more, Kevin repositioned into a new option with the original investment amount. He bought to open a March 120.00 Call in VC today. As a result, the portfolio will continue making money if the stock moves higher, but won’t give back any principal if it moves lower. VC is a Zacks Rank #1 (Strong Buy) automotive supplier that makes climate, electronic, interior and lighting products for vehicle manufacturers. Read the complete commentary for more on today’s action.  

Surprise Trader: In addition to being a Zacks Rank #1 (Strong Buy), Titan Machinery (TITN) is also in the highly-ranked Automotive – Retail & Whole Sales industry (Top 4%). The company represents a diversified mix of agricultural, construction, and consumer products dealerships located in the upper Midwest. It has beaten the Zacks Consensus Estimate for three consecutive quarters, including a monster surprise last time. Now TITN has a positive Earnings ESP of 17.5% for the quarter coming before the bell on Tuesday, November 24th. Shares have been rallying of late, yet there’s still plenty of ground to recover before reaching its highs in the mid-$20s. Dave added TITN on Wednesday with a 12.3% allocation and also sold Spectrum Brands (SPB) for 1.6%. Read the full write-up for more. 

TAZR Trader: Market sentiment has been pretty bullish of late... maybe a bit TOO bullish. Kevin has been raising cash lately because he’s cautious for the short-term. The vaccine news has been encouraging, but there’s still a long way before the world’s population is inoculated. On Wednesday, the editor decided to sell Keysight Technologies (KEYS) before its earnings tonight. This provider of electronic design and test instrumentation was added in late August and brings a nice return of 15.4% to the portfolio. Last time, the stock beat by more than 40%, but Kevin got most of what he wanted from this name already and would prefer to play it safe for now.

Have a Good Evening,
Jim Giaquinto

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