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New Record for NASDAQ as Rate Cut Seems Likely

Jim Giaquinto

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The market got what it wanted from Fed Chair Jerome Powell this morning, sending the major indices to new intraday highs before moderating a bit by the close.

In his testimony to the House Financial Services Committee, Mr. Powell basically stated that the economy was doing reasonably well, but “crosscurrents” are adding to uncertainty.  

Trade issues and slowing growth are among the challenges facing the economy.

In other words, a rate cut later this month seems like a great idea to keep the good times going!

The rally pushed the S&P past 3,000 for the first time in its history, but then stocks pulled back the reins a bit before getting too far ahead of itself.

The uptrend was still enough for the NASDAQ to close at a record high, gaining 0.75% (or more than 60 points) to 8202.53.


In addition to the news on rates, it was also another solid session for the FAANGs. Facebook rose 1.77%, while Amazon, Google and Apple also increased by 1% or more.  

The S&P may have crossed over 3,000 momentarily, but it doesn’t seem ready to close over the mark just yet. However, it was still up 0.45% to 2933.07 or about two points away from a new high.

The Dow finally ended a three-day losing streak with an advance of 0.29% (or about 76 points) to 26,860.20.

And we’re getting even more Powell tomorrow as he’s scheduled to testify in front of the Senate Banking Committee!

Odds are that he won’t suddenly turn hawkish in the span of 24 hours. But will stocks feel comfortable enough to set new records? Will the S&P be able to close above 3,000? It would sure be fun to go into earnings season with the major indices at all-time highs…  

Today's Portfolio Highlights:

Home Run Investor: It’s “feast or famine” when it comes to Titan Machinery (TITN), according to Brian. The company had three big beats over the past four quarters and one big miss. The editor likes the idea of “feasting three out of four times”, so he added this operator of agricultural, construction and consumer products dealerships on Wednesday. The stock has been strong of late and Brian thinks it will continue. Best of all, rising earnings estimates has made it a Zacks Rank #1 (Strong Buy). Read the full write-up for more on TITN.

Healthcare Innovators: Lowered revenue and EPS guidance in the past two quarters has made BenefitFocus (BNFT) a very cheap stock. But Kevin thinks the dust has settled, leaving behind a cloud-based benefits management software solutions company that’s expected to grow revenue by 17% for this year and next. BNFT knows what it has to do with its guidance next time, so the editor expects a better report on August 1. You can consider this to be the portfolio’s latest healthcare-focused pure-play software investment. Learn a lot more about this new buy in the complete commentary.

Options Trader: Stocks deserve second chances too! Case in point, Burlington Stores (BURL) was sold late last month for a slight loss. However, Kevin feels that he just ran out of time. The editor is still bullish on this off-price apparel and home products retailer. In fact, he still has a price target of $195. So, BURL returned to the portfolio on Wednesday with a couple bull call spreads by buying to open 2 December 180.00 Calls AND selling to open 2 December 190.00 Calls. Now it has until expiration in mid-December to get to $190, which would give the portfolio a 138% return. Read the full write-up for more.

Surprise Trader: The portfolio thinks that Domino’s Pizza (DPZ) can deliver another beat when it reports before the bell on Tuesday, July 16. This Zacks Rank #2 (Buy) has a positive Earnings ESP for the upcoming report and beat expectations by 6% last time. The editor added DPZ on Wednesday with a 12.5% allocation. Read the full write-up for more.

Stocks Under $10: Talk about timing! The portfolio added Harmonic (HLIT) yesterday, and then after the bell we learned that Comcast decided to use elected enterprise pricing for its CableOS software. That means around $175 million in software license fees over the next four years for this video infrastructure products company, including about $50 million this year. Comcast is also buying shares in HLIT. Therefore, on its first full day in the portfolio, the stock soared more than 24% and became the best performer among all ZU portfolios by a wide margin.

All the Best,
Jim Giaquinto

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