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Stocks Soar on Strong Jobs Report; NASDAQ at New High

Jim Giaquinto

The jobs report for April was so strong that the NASDAQ and S&P are back at all-time highs. They also finished the week higher despite the past couple days of losses.

The economy added 263,000 jobs last month, which crushed expectations for only around 190,000. Plus, the unemployment rate is now down to 3.6%.

The market had been down in the dumps since the Fed took a rate cut off the table on Wednesday. The indices headed into Friday’s session with losses for the week, but that’s not how things ended.

The NASDAQ rallied by 1.58% today (or about 127 points) to a new record of 8164. In addition to the upward momentum after the jobs report, this index also got help from news that Berkshire Hathaway recently bought some Amazon (+3.24%).

The S&P is practically at a new high in its own right. However, if you want to get really technical about it, the index is less than 1 point away after jumping 0.96% to 2945.64.

These indices improved 0.2% for the week, which was a nice change of pace after the recent sluggishness.

The Dow jumped 0.75% (or nearly 200 points) to 26,504.95 and almost joined its counterparts in the green for the week, but ended up with a slight 0.1% loss for the past 5 days. Its still about 1.2% (or around 320 points) from joining its counterparts in record territory.

So last Friday was all about a better-than-expected Q1 GDP of 3.2%, while this Friday was focused on a better-than-expected jobs number. In between, we’ve enjoyed an earnings season that has been better than expected as well. Investors are in a much-improved mood from the weeks heading into the season when expectations were being lowered. Looks like they were lowered too much!

Now if only we could get that trade deal with China…

Today's Portfolio Highlights:

Blockchain Innovators: Cryptocurrency can help people bring their ideas to market. That's what Avnet (AVT) had in mind when it struck up a deal with BitPay, the largest global blockchain payment provider. The company will now be able to accept cryptocurrency for products and services, which it believes will further break down the barriers between its customers and their goals. AVT is a technology solutions company that distributes electronic components worldwide. Dave added AVT on Friday for its interest in blockchain (of course), but he also likes its Zacks Style Scores of “A” for both Value and Growth. Read more in the full write up.

Home Run Investor: The addition of Ultra Clean (UCTT) on Wednesday was certainly a good move! The semiconductor-equipment maker soared more than 15% today after a strong quarterly report, making this stock the top performer of the day among all ZU names. Brian Bolan had a feeling that the disappointing report from Intel wouldn’t keep UCTT down for long... and he was right! The editor also wanted to be in this name before a trade deal with China was announced, which is hopefully right around the corner. So far, its up nearly 19% in the portfolio in just two days. By the way, the editor also sold Carbonite (CARB) on Friday for a 12% return.

Options Trader: It looks like Asbury Auto (ABG) is on the verge of another upside breakout. This Zacks Rank #2 (Buy) automotive retailer beat by more than 14% in its latest quarterly report and is also part of a space in the top 9% of the Zacks Industry Rank. Kevin added a bull call spread in ABG on Friday by buying to open 4 July 80.00 Calls AND selling to open 4 July 85.00 Calls. This move will make 122% for the portfolio if ABG closes at or above $85 by its mid-July expiration.

The portfolio also bought to open 3 January 50.00 Calls in insurance giant Aflac (AFL), which is a Zacks Rank #2 (Buy) that recently beat the Zacks Consensus Estimate by more than 6%. This stock also finds itself in the top 9% of the Zacks Industry Rank. Kevin sees a price target of $60 for starters. Get more specifics in the full write-up.

Surprise Trader: Shares of GreenDot (GDOT) have moved sharply lower from its highs, but earnings estimates for this Zacks Rank #2 (Buy) remain elevated. As a result, Dave sees a great opportunity! This bank holding company, which is the largest provider of prepaid debit card products in the U.S., is scheduled to report after the bell on May 8. It has a positive Earnings ESP for the quarter. The editor used the portfolio’s remaining cash to buy GDOT, which comes to an approximately 12% allocation. Read the full write-up for more.

Stocks Under $10: Fluidigm Corporation (FLDM) has been a good performer for the portfolio, but shares of this biotech tools company are down double digits today after missing on the bottom line. Brian Bolan thinks this is a good time to part ways with the stock and bank a solid return of nearly 47% in 5 months.

Have a Great Weekend!
Jim Giaquinto

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