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Tech Recovers, but Dow, S&P Remain Under Pressure

·5 min read
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Tech had a nice little rebound on Thursday following yesterday’s sluggishness, but two-thirds of the major indices still moved modestly lower as the market struggled through some weak jobs data without new stimulus measures.

The NASDAQ rose 0.54% (or nearly 67 points) to 12,405.81, which barely makes a dent in Wednesday’s 1.94% plunge.

The FAANGs made a good recovery after they all dropped by approximately 2% or more the other day. In fact, Netflix (NFLX) rose over 1.5% while Apple advanced 1.2%.

And Facebook (FB) was only off by 0.29% despite being just one day removed from the FTC filing an antitrust lawsuit.

However, the Dow slipped 0.23% (or just about 70 points) to 29,999.26, while the S&P was down 0.13% to 3668.10. Both of these indices now have back-to-back losses.

This also marked the Dow’s first close beneath 30K this week. It was last below this milestone exactly one week ago on December 3.

Jobless claims soared to 853,000 last week, which you could probably have expected as restrictions have tightened around the country amid rising coronavirus cases.

This was the first time over 800K since October 15 and was much worse than expectations around 730K and the previous week’s 712K.

The number provides yet another sign that a stimulus package would be very helpful right now as we wait for these vaccines to make it to the public.

Speaker Pelosi did say that “great progress” has been made in talks, but we’ve heard that kind of thing before without any results. And we know the two sides remain far apart on several issues.

About the only real progress of late was the House passing a one-week government funding extension yesterday through Dec. 18 that will avoid a government shutdown and give Washington more time to hammer out a deal.

So that’s something! Hopefully, it will lead to more in the coming days.

Today's Portfolio Highlights:

Surprise Trader: Earnings season may be over, but there are still some well-known companies that have yet to report. For example, FedEx (FDX) doesn’t go to the plate until after the bell on Thursday, December 17. It has a positive Earnings ESP of 5.35%. As part of the transportation - air freight space, FDX is in the top 15% of the Zacks Industry Rank and has a Zacks VGM score of "A". Dave bought this name on Thursday with a 12.5% allocation, while also selling the underperforming Signet Jewelers (SIG) and Central Garden and Pet (CENTA) positions. See the full write-up for more on these moves.

Commodity Innovators: A couple of the portfolio’s energy picks hit Jeremy’s targets, which means the odds of a pullback have increased. No big deal... the positions both bring double-digit gains in under a month! SPDR S&P Oil & Gas E&P ETF (XOP) was sold for a 24.7% return and United States Gasoline ETF (UGA) was let go for a 13.6% profit. The new buy is IPath Bloomberg Cocoa Subindex Total Return ETN (NIB), which obviously tracks the price movement of cocoa. This chocolatey commodity has pulled back from 2020 highs recently and should rally early next year. The editor considers this a long-term holding. Read the full write-up for more on today’s action. In other news, this portfolio had a top performer today as Cleveland-Cliffs (CLF) advanced 11.7%.

Blockchain Innovators: Shares of Digi International (DGII) really took a header at the end of last year, but finally troughed in mid-2020. Since then, the stock has been regaining its footing and Dave thinks that positive momentum will continue. DGII is a Zacks Rank #2 (Buy) provider of business and mission-critical Internet of Things products and services. The company has solid current year EPS growth with estimates calling for more than 53% year-over-year. The editor likes such forecasts and so he added DGII on Thursday. By the way, the portfolio also sold MasterCard (MA) for a nice 81.6% return after the credit card company slipped to a Zacks Rank #4 (Sell). See the complete commentary for more on today’s moves. 

Healthcare Innovators: The epic surge in Editas Medicine (EDIT) continued on Thursday with the gene-editing company again making the top performers list with a jump of 32.15%. The stock has now skyrocketed to the top of this portfolio with a rise of nearly 114% in just eight days! Therefore, it’s also the biggest mover in the past 30 days among all ZU names. But believe it or not, EDIT WASN’T the best performer from this service today. That honor goes to Sangamo Therapeutics (SGMO), which soared 53%. Furthermore, Anavex Life Sciences (AVXL) also made the list with an increase of 7.7%, which means this portfolio had three of the top five names in the session. And for more on the gene-editing explosion, make sure to catch Kevin's latest "Cook's Kitchen" titled CRISPR Gene Editing: Owning the Future of Medicine.

All the Best,
Jim Giaquinto

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