Stocks Jump 3%+ This Week Despite Another Friday Selloff
You know we’ve had a good run when the Dow drops more than 275 points on Friday and still gains 3% for the week.
Once again, investors were nervous heading into the weekend with the coronavirus continuing to spread, so the market’s four-day winning streak came to a close despite a strong jobs report.
But this time, it didn’t ruin the whole week! Along with the Dow’s 3% rise over the past five days, the NASDAQ jumped 4% and the S&P rose 3.2%.
In addition to the market shrugging off the coronavirus (until today), this week also saw the first expansion for manufacturing since July while China halved tariffs on $75 billion worth of U.S. imports as part of the Phase 1 deal.
And the good news culminated today with a fantastic employment report, which saw the economy add 225,000 jobs last month. The market was only expecting around 160,000.
But that jobs report wasn’t enough for the market to rally out the week. With the coronavirus still an issue, the weekend is two days when anything can happen… and that’s just too much uncertainty for many investors.
Plus, after four days of gains – including three triple-digit surges for the Dow – a bit of a pullback is understandable.
The index dropped 0.94% (or about 277 points) on Friday to 29,102.51. It was still up more than 800 points this week.
The other two major indices each slipped 0.54%. The NASDAQ was down more than 51 points to 9520.51 and the S&P dipped over 18 points to 3327.71.
Remember where we were at this time last week? The S&P and Dow had turned negative for the year due to a sharp selloff on Friday. It was fun to watch stocks make up all of those losses this week and reach new highs during a four-day win streak. However, the coronavirus is still around and remains an uncertainty that could overshadow solid earnings or economic data (like it did today).
Let's see if the market can stay resilient until the globe gets a handle on this sickness, which will hopefully happen sooner rather than later.
Today's Portfolio Highlights:
Surprise Trader: Since going public in mid-2018, Pluralsight (PS) has either exceeded or matched the Zacks Consensus Estimate each time. And now its heading into another report after the bell on Wednesday with a positive Earnings ESP. PS is an enterprise technology learnings platform that offers online training courses for professional developers, IT admins and creative artists. Last quarter, the company beat earnings by nearly 43% on revenue growth of 34.1%. Dave added PS on Friday with a 12.5% allocation. The editor also sold Silicon Motion (SIMO). Read the full write-up for more on today’s moves.
Counterstrike: "Four out of the last five Fridays have been red as this fear has been the theme going into the weekend. In addition to Japan, we saw 12 cases in Bavaria, Germany. While the virus has been contained, there are these pockets of news that cause the market to remain sensitive. That being said, we remain close to all-time highs.
"As long as the virus remains contained to China, the market won’t really care. This despite the economic damage that is being caused in Asia. Next week we will look for economic data in the form of CPI and retail sales. In addition, Fed’s Powell testifies in front of Congress Tuesday and Wednesday.
"Right when we think its an easy ride to 3400, we get news to turn the atmosphere. Lets see how the news goes over the weekend as it seems markets are once again sensitive to Corona headlines." -- Jeremy Mullin
Have a Great Weekend,
Jim Giaquinto
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