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NASDAQ Joins S&P in Record Territory

Jim Giaquinto

That’s a great way to end a week and start a new month!

Bolstered by a stronger-than-expected jobs report, two of the three major indices finished Friday at record highs while adding onto impressive weekly winning streaks.

The best performance (on a percentage basis) was the NASDAQ, which jumped 1.13% (or about 94 points) to 8386.40. That’s a new closing record for the tech-heavy index.

New highs are old news for the S&P, which reached its third record in the past 5 days by climbing 0.97% to 3066.91.

The Dow is lagging behind its counterparts, but isn’t far off from making its own history. It jumped 1.11% (or 301 points) today to 27,347.36.

The NASDAQ now has a five-week winning streak after gaining 1.7% over the past 5 days, while the S&P has a 4-week run by rising 1.5%. The Dow now has back-to-back weekly gains with an advance of 1.4%.

The big news of the day was the economy adding 128,000 jobs in October, which trounced expectations of only around 75,000 (which was impacted by the GM strike). Equally as important, results for September and August were revised upward.

Meanwhile, the ISM Manufacturing result for October was at 48.3, which marked the third straight month of contraction (anything under 50). However, the result was better than last month’s 47.8, suggesting that the softness in manufacturing isn’t getting worse at the moment.

And remember yesterday’s concerns that the U.S. and China may not be able to come together for a long-term deal? On second thought, don’t worry about it.

The latest episode in this trade drama was a positive one with China talking about a “consensus in principle” and the U.S. touting all the progress that has been made.

All in all, it was a fantastic week for the market and investors. We enjoyed a continuation of better-than-expected earnings (including Apple and Facebook), respectable economic data and, most importantly, another rate cut.

November and December are historically solid months for the market (last year, of course, being an exception). Let’s see if the market can rally out the year, starting with a new high for the Dow next week! 

Today's Portfolio Highlights:

Blockchain Innovators: Earnings estimates have been rising for MicroStrategy (MSTR) in just the past week, which explains why the company is a Zacks Rank #1 (Strong Buy). This cloud-based platform provides enterprise software, so it’s also part of a space in the Top 23% of the Zacks Industry Rank. Dave likes what he sees and decided to add MSTR on Friday. He also sold the slumping MoneyGram (MGI) position. Read the full write-up for more.

Healthcare Innovators: It’s been less than a month since Kevin added dental innovator and smile-maker Align Technology (ALGN), and the stock is already up 40%! Basically, the editor perfectly “aligned” the addition of the Invisalign teeth straightener and now the prudent move is to secure that profit, especially as it has achieved most analyst price targets given moderating growth. Kevin actually had a 4-point rationale for selling ALGN now, so make sure to read the full write-up for more. 

Surprise Trader: Before the bell next Thursday, Core-Mark (CORE) will be going for an 8th straight positive surprise… and it just so happens that this Zacks Rank #1 (Strong Buy) has a positive Earnings ESP of 1.82% heading into the report. The company is one of the largest marketers of fresh and broad-line supply solutions to convenience stores, grocers, drug, liquor and specialty stores. Yes, you’ve probably used some of their products without realizing it. Well, Dave realizes this company is set up for more success and so he added CORE on Friday with a 12.5% allocation. Read the complete commentary for more.

Marijuana Innovators: Several cannabis companies will be reporting results over the next two weeks, and Dave is kicking things off by adding Aurora Cannabis (ACB). This Canada-based (of course) company is engaged in the production and distribution of medical cannabis. With shares near a two-year low, the editor thinks this stock has significant upside potential with limited risk. Read the full write-up for a lot more on this new buy.

Value Investor: "With the economic expansion finishing its 10th year, and no end in sight, the bears are getting mighty grumpy.

"The manufacturers in the survey were cautious, but not negative. They weren't laying off employees or seeing a dramatic slowdown, but the trade/tariff issues were impacting and they were keeping things close to the vest.

"But unless those conditions worsen further, it doesn't appear its bad enough to push the rest of the economy into a recession in early 2020 as many had predicted. Some analysts are already taking their recession calls off the table for the first half of 2020.

"And you know what that means for us. The Fed has lowered rates again so money is easy. Corporate tax rates are low. The consumer is healthy. Buy stocks."
-- Tracey Ryniec

Have a Great Weekend!
Jim Giaquinto

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