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Market Closes Strong with Weekly Gains and New Highs

Jim Giaquinto

We enjoyed a good closing session on Friday that ensured positive weekly performances for all of the major indices, while two of them also returned to all-time highs.

A nearly 10.5% surge in Alphabet helped the NASDAQ make up for yesterday’s losses and then some. It was the first full session after the search giant beat on both the top and bottom lines while announcing a $25 billion share repurchase program.

As a result, the tech-heavy index leapt 1.11% (or more than 91 points) to 8330.21. Meanwhile, the S&P climbed 0.74% to 3025.86. For the week, these indices jumped 2.3% and 1.7%, respectively.

The NASDAQ and S&P also finished at record highs for the second time in the past three days.

The Dow was up 0.19% (or about 51 points) to 27,192.45. It was positive for the week as well, but the index needed every inch of Friday’s rally as the gain was only 0.1% for the past 5 days.

The market has now advanced in three of the last four weeks, making for a solid monthly performance for July as we move toward the final three sessions.

In addition to a better-than-expected earnings season (so far), the market also got a boost from the second-quarter GDP result of 2.1%. It was a ‘just right’ reading in front of next week’s rate decision, since it beat expectations but slowed down from the previous year.

The best part of the report, though, was consumer expenditures rising 4.3%. Despite all the challenges out there right now, the American consumer continues to be strong. We’ve seen that strength all through this earnings season, including recent reports from McDonald’s and Starbucks.

Next week will be all about the Fed. The market is making it pretty simple: it’s demanding a rate cut! And investors are practically unanimous that it will get one.

Today's Portfolio Highlights: 

Counterstrike: Whatever happens with the Fed next week, Jeremy thinks we could be in store for a pullback. Therefore, the editor locked in three double-digit gains on Friday, including a nice 33.6% return for YETI Holdings (YETI) in just a little over two months. He also sold Xilinx (XLNX) for a 13.8% return in about 6 weeks, as well as two-thirds of ProShares Ultra Silver ETF (AGQ) for 11.8% in a month.

Value Investor: Large caps are outperforming this earnings season, so Tracey wants more exposure to these big guys. On Friday she added Delta (DAL), which also gives the portfolio exposure to the airlines. This company has one of the best balance sheets in its industry, and recently increased its share buyback program while raising its dividend. Along with all the value characteristics, DAL is also expected to grow earnings 24% this year and another 5% next year. But perhaps most importantly, Tracey added DAL because it has no exposure to the grounded 737 Max planes. Read the complete commentary for more on this new addition.

Surprise Trader: Investment management firms are doing great with the market at all-time highs, so Dave decided to add a 12% allocation in Artisan Partners Asset Management (APAM) on Friday. This Zacks Rank #2 (Buy) has beaten the Zacks Consensus Estimate in four of the past five quarters and has a positive Earnings ESP for the report coming after the close on Tuesday. The editor sold BJ’s Restaurants (BJRI) to make room for the new addition. Read the complete commentary for more.

Have a Great Weekend!
Jim Giaquinto

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