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Jobs Report Brings 1.4% Gains to End a Crazy Week

Jim Giaquinto

Sometimes you get exactly what you need at exactly the right time.

Case in point, today’s jobs report threaded the needle between “too hot” and “too cold”, allowing the major indices to rally out a rough week.

Each of the major indices jumped by 1.4% on Friday for their second consecutive day in the green after sharp plunges to begin the quarter.

The NASDAQ added approximately 110 points to 7982.47 and was the only major index to post a gain for the week. It was up 0.5% over the past 5 days.

The Dow soared 372 points to 26,573.72 and the S&P advanced more than 41 points to 2952.01.

This valiant effort reduced the indices’ weekly losses to 0.9% and 0.5%, respectively, though they’ve now been in the red for three consecutive weeks.

The economy added 136,000 jobs last month, which was a bit below expectations. However, the unemployment rate is down to 3.5%, which hasn’t been seen since the year of Woodstock (the original one).  

Investors considered it one of those 'goldilocks' numbers. It was strong enough to assuage growing fears of a recession, but weak enough to keep the Fed on the side of another rate cut before the year is out.

We also got an advantageous lead-in from the ISM reports earlier this week, which included a second month of contraction for manufacturing and a bit of a slowdown for services. Skittish investors were probably waiting for a much more alarming jobs report.

And let’s not forget about Apple’s part in today’s rally. A report stated that the company was increasing iPhone 11 production by 10%. The stock jumped 2.8% today and was a big reason for the NASDAQ getting onto the plus side for the week.

We can go into the weekend feeling a lot better about things compared to Tuesday and Wednesday when the Dow plunged more than 800 points. However, we could use a break from all this uncertainty.

It would be a big help if we got something real out of the trade talks with China next week. Or at least some good news that shows the two sides are making progress on a deal.

As stated earlier, sometimes you get exactly what you need at exactly the right time. Let's keep our fingers crossed that this is one of those times...

Today's Portfolio Highlights:

Counterstrike: Has this been a dead cat bounce the past couple of days? Jeremy thinks so. Therefore, the portfolio got short on Friday by adding a 10% allocation in Direxion Daily S&P 500 Bear 3X Shares (SPXS). Basically, this position will make three times the loss of the S&P while its in the portfolio. Read more about this new buy and take a look at its chart in the complete commentary.

Blockchain Innovators: There are lots of BIG companies in this portfolio as more and more giants embrace blockchain to improve their businesses. But Dave’s pick today is a much smaller name. Fastly (FSLY) is an infrastructure software company with an edge cloud platform that helps companies scale up their blockchain offerings. In other words, demand is high for its services with no end in site. Current estimates forecast double-digit earnings and sales growth for next year, while earnings estimates have been on the rise for the same period. The editor added FSLY on Friday and also sold the underperforming Lending Club (LC). Read the full write-up for a lot more on today’s moves.

TAZR Trader: The semis are near all-time highs and have a far way to fall if the “phoenix rising” scenario for the third and fourth quarters doesn’t happen. Kevin was already skeptical that anything will happen in next week’s trade talks, which is why he added Direxion Semiconductor 3X Bear ETF (SOXS) on Tuesday. And on top of all that, the continuing protests in Hong Kong is further complicating the editor’s bearish and cautious view. Therefore, he added more of SOXS on Friday. Read the full write-up for more.

Marijuana Innovators: It looks like Constellation Brands (STZ) might be looking at its investment in Canopy Growth (CGC) as more of a nuisance than an opportunity. Despite the beverage giant beating expectations and raising its guidance in the most recent quarter, Dave decided this was a good time to sell STZ and secure the nice 15% return.

Have a Great Weekend!
Jim Giaquinto

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