NASDAQ Rises 2.5% While S&P Hits New Record

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The massive covid relief plan is now real, which helped the S&P to a new closing high on Thursday while sparking another sharp rally for the beleaguered tech space.

Just a day after passing the House, President Biden signed the $1.9 trillion stimulus plan that includes direct payments of $1400 to Americans, along with funds for local governments and the vaccine rollout.

It was certainly no surprise since the Democrats took over complete control of the government in the recent elections, but the market still appreciated that this long-awaited help was finally a reality.

The S&P jumped 1.04% to a fresh closing high of 3939.34. The index’s last record was nearly a month ago on February 12. The Dow made history for a second straight day by rising 0.58% (or about 188 points) to 32485.59.

However, the most impressive performance came from the NASDAQ, which jumped 2.52% (or nearly 330 points) to 13,398.67. The index was briefly in correction territory earlier this week, but has halved the double-digit deficit since then. It is now just a little more than 5% away from its own record.

The stimulus plan wasn’t the only bit of good news on Thursday. Last week’s jobless claims came to 712,000, compared to expectations at 725K. This report marks three straight weeks of better-than-expected results.

Furthermore, the 10-year Treasury yield, which wreaked so much havoc over the past few weeks, remained rather steady at just over 1.5% after jumping past 1.6% on Monday. Yesterday, we received a pretty good Consumer Price Index that was in-line with expectations rather than spiking higher. So for the moment, investors aren’t hyperventilating about rising rates or inflation.

The S&P and Dow are each up about 2.5% for the week heading into Friday’s session. However, the NASDAQ has gained more than 3.5% after rallies of 3.7% on Tuesday and 2.5% today, so the index looks poised to break its three-week losing streak.

Today's Portfolio Highlights:  

Options Trader: The March 135.00 Call in Nasdaq, Inc. (NDAQ) expires next week, so there would be no time to recover in the event of a pullback. Therefore, Kevin pulled his profits in that March option for 18% and repositioned for more time by buying to open a June 145.00 Call in NDAQ. In other news, Lennox Industries (LII) looks like its finally ready to break out after a six-month consolidation. The editor bought to open a June 310.00 Call in this heating, air conditioning and refrigeration staple. Read the full write-up for a lot more on today’s moves.  

Counterstrike: The recent tech selloff created countless opportunities for investors, and Jeremy capitalized on one today by adding Casa Systems (CASA) with an 11% allocation. The company develops and provides digital cable video and broadband services. It beat the Zacks Consensus Estimate by 145% in its recent report and just moved back above its 50-day MA. Meanwhile, the editor also added 4% more to his eBay (EBAY) position as it comes up to the 50-day. Jeremy thinks the resistance will break and send the stock back to the $59-$60 area. Get more specifics on today's moves in the complete commmentary.

Technology Innovators: With the tech selloff easing and stimulus on the way, Brian thinks its time to increase overall exposure in the portfolio. On Thursday, he added satellite communications company Iridium Communications (IRDM). This stock got “smashed” lately, but the editor thinks it still has good prospects. IRDM topped the Zacks Consensus Estimate in each of the last four quarters with an average surprise of 49% over that time. Earnings estimates are also inching higher. Read the complete commentary for more on this new addition.  

Commodity Innovators: The portfolio picked up two ETNs on Thursday; one is focused on meat while the other is all about cotton. First of all, Jeremy picked up IPath Series B Bloomberg Livestock Subindex Total Return ETN (COW), which offers exposure to livestock as we wait for restaurants to finally reopen. More specifically, hogs are breaking higher right now, while cattle could get a bounce as it comes into the 50-day MA. The editor also picked up IPath Series B Bloomberg Cotton Subindex Total Return ETN (BAL), which should benefit from increasing demand and lower supply for the rest of the year. These are both considering long-term holdings. Speaking of the long term, Jeremy decided to sell Energy Select Sector SPDR ETF (XLE) to collect a nice 50.8% return in about five months. Read the full write-up for more on all of today’s moves.

Surprise Trader: In order to book some profits and free up some space, Dave sold half of Rent-A-Center (RCII) on Thursday for a nice return of more than 20% in less than a month. He’ll let the other half run for a bit longer. The new addition is Titan Machinery (TITN), which offers a diversified mix of agricultural, construction and consumer products dealerships in the upper Midwest. The company has a positive Earnings ESP of 27% for the quarter being reported before the bell on Thursday, March 18. TITN was added with a 12.5% allocation. Read the full write-up for more on today’s action.

Until Tomorrow,
Jim Giaquinto

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