Nasdaq ends higher while S&P 500 posts biggest August gain since 1986

After last week’s rotation from growth (tech) to value (the Dow), investors decided today to return to the conventional bet of focusing again on the tech companies that will do well regardless of the pandemic. So there was a reverse rotation today out of the Dow and back to tech with the Dow slumping 223 points as a result. This was likely triggered by the weekend news that coronavirus cases have now topped 6 million.  Last week caution favored value, today tech, referred to as the “old pandemic playbook.”  The S&P is now almost 4% above its pre-crisis record, the Nasdaq almost 20% as last week’s sell off suddenly made all these momentum stocks look more attractive. The S&P has seen a 35% gain since April, its strongest run since 1938.  The biggest winner was Aimmune Therapeutics, a maker of a peanut allergy treatment, which soared 171% after news that Nestle offered to buy them for $2 billion.  For once volume was above the 4-week average at 9.4 billion. 

Succinct Summation of Week’s Events for 8.28.20 (plus the Peter Lynch strategy)

Below please find the usual weekly summation, the main positive being the Fed's new statement that interest rates will not be raised for the foreseeable future (though I think "never, ever, ever" is a bit of an overstatement.)  The negatives remain the same: continued social unrest and jobless claims rising (and does anyone not think that those two are related?)  The bonus this Sunday is another AAII article, this one another very good primer on investing but based on the strategies of one of history's most successful investors -- Peter Lynch.  There follows a bit of a promo for AAII's proprietary advisory subscription "A+ Investor." Hope everyone enjoyed this beautiful weekend.  

Picking ETFs and mutual funds.

For your reading pleasure this weekend I have discovered an article from this week's AAII which talks about one of our favorite topics -- ETFs. Since most of us favor ETFs, this should provide a very good review and primer regarding the process of selecting ETFs and mutual funds.  Enjoy the beautiful weekend. 

Tech powers S&P 500 to record closing high, Dow now positive for the year

It was another 3-digit day for the Dow with the continuing rotation to value helping to put the blue chip index finally in the black for the year. All three major indexes had gains which put the S&P at its sixth record high since August 18^th and the Nasdaq at still one more record, putting the latter two in their fifth consecutive weekly gains.  The rally was driven by better than expected consumer confidence (spending) though savings, an indicator of uncertainty, remained well above pre-pandemic levels. Other good news included the Fed’s new acceptance of higher inflation, word from the White House that Trump is willing to sign the $1.3 trillion pandemic relief bill, and reports that Hurricane Laura did not cause as much damage as initially feared.  Volume is still below the 4-week average at just over 8 billion. 

S&P, Dow close higher on new Fed inflation stance, COVID test hopes

The Dow and S&P once again advanced but the Nasdaq took a step back as the markets took another rotation out of growth (tech) and into value. The Fed’s remarks again validated a dovish stance but at least investors got the wanted news of a steepening of the yield curve, something the Fed minutes last month backed away from. With new jobless claims still above the 1 million mark for the week, Powell announced a strategy for full employment but that appears currently destined for the long haul.  But the Dow picked up enough steam today to jump from 4% shy of its February record to today just 3.6%  shy of that goal. Volume remains below average at just under 9.2 billion, but at least it’s just a tad below the 4-week average of just under 9.4 billion. 

Wall Street closes higher as momentum stocks push S&P 500, Nasdaq to new highs

As has been the case for quite some time, the tech companies continue to do well and have pushed the Nasdaq to its 39^th closing all-time high for the year and the S&P to its fourth consecutive record high.  These are all companies that have proven to be open for business and profitable regardless of the pandemic. The Dow remains 4.1% below its pre-pandemic record but just 0.7% below a YTD gain. Volume remains below average at 8.5 billion. 

S&P 500, Nasdaq close at record highs on trade, vaccine developments

It was still another record setting day for both the Nasdaq and S&P even though the Dow took a modest dive as Apple’s stock sank almost 1% after a few days of impressive gains over its upcoming stock split this Friday. Apple’s split has triggered a reshuffling of the blue chip average with Salesforce replacing Exxon, Amgen Pfizer and Honeywell Raytheon creating sufficient dilution to bring the Dow down 60 points.  The good news for the day is Astra Zeneca beginning trials for its COVID-19 drug and new home sales surging to a 13 year high.  The concern remains that the stock market does not seem to currently reflect our economic problems but today’s expert was quick to point out that the market always reflects investors’ views of the future, not the present.  “Wall Street believes in a year from now the economy is going to improve.” But for now it is true that the market and the economy are in opposite directions. Uncertainty remains which is reflected in the continuing below average volume of 8.3 billion. 

S&P, Nasdaq close at new highs as Wall Street rides bull momentum

It was another great day for all three indexes with the S&P and Nasdaq reaching new records on pandemic optimism and all global markets boosted by Friday’s upcoming 4 to 1 split on Apple stock. A new bull market has again been confirmed though the Dow, with today’s 378 point boost, remains 4.2% below its record. But since it was down 5% as recently as last Wednesday, being today just over 4% is pretty good progress.   Besides Apple, the big positives today were newly announced vaccine progress and the emergency authorization of a new plasma treatment for COVID-19.  But uncertainty being what it is, volume remains below average at 8.9 billion. 

Succinct Summation of Week’s Events 8.21.20 (plus 9 of the Best Gold ETFs to Hedge Volatility)

Below is the usual week-end weekly summation, the main positive that the markets continue to make gains as new COVID-19 infections seem to be slowing. The main negatives continue to be the bungled handling of the pandemic and that we still have 75 whole days to go before the election (or switching this to a positive that we continue to make progress towards both a vaccine and treatment and that there are only 75 days to go before the election.)  The bonus this time is yet another contribution from U.S. News Invested, this time on the subject of gold.  We all love gold.  It's not only a good hedge against bad markets but is also pretty to look at. This particular edition talks about the best ETFs for investing in gold.  It's going to be a hot week, both climate-wise and politically.  Try to stay cool and calm.  

10 of the Best Blue-Chip Stocks to Buy for 2020

Once again for your weekend reading pleasure I submit this recent edition of U.S. News Invested. Knowing that many of you are short-term traders, this may be of limited value, but for others of you who are simply in the market for long-term value in very solid companies, this list of the 10 best blue chippers should be of interest. Enjoy these remaining "dog days" of summer. I just learned this week that this expression is centuries old and refers not to the lazy days of these hot summer weeks but rather to the fact that the "dog" constellation is most visible during the month of August.  

S&P 500, Nasdaq end at records after upbeat business surveys

Still riding high on the Apple rally which for the third day pushed that company’s stock up again, today over 5%, both the Nasdaq and S&P reached new records again and the Dow bolted up over 190 points. Tech is viewed as one of the sectors that will emerge stronger from the pandemic and Apple is the chief of tech. But worries still abound – the continuing stalemate over the next pandemic aid bill and the 28 million unemployed. But the good news remains that the three major indexes continue to rise and this was validated again today with business activity being at its highest in 18 months (well before the pandemic) and strong reports coming from manufacturing, services, and new home sales.  Volume remains below average at 8.4 billion. 

Nasdaq closes at all-time high as strong tech sector offsets jobless data

Investors remain in a cautious mood after yesterday’s pronouncement from the Fed that we still have a difficult road to recovery. This was reflected in the modest jump of 46 points on the Dow even though the S&P and Nasdaq did markedly better, mostly on the strength of Apple becoming the first publicly listed company in history to pass the $2 trillion mark in value. The cautionary note remains that jobless claims rose above the million mark again but this should not have surprised anyone since the only reason it dipped in the first place was the expiration of the extension of jobless benefits. (When they are finally reinstated, jobless claims will rise again even more.)  The good news is that, though some experts feel “the market is getting a little too exuberant,” since stocks reflect not the current state of affairs but how investors feel about the prospects for the future, we can take heart that they feel the future is hopeful. As caution is the dominant sentiment, volume remains below average at 8.9 billion. 

Wall Street ends lower after Fed minutes highlight tough recovery

 There was a minor slump in all three indexes today when the Fed failed to deliver the message investors were hoping for. This is to say that the Fed remained cautious on their outlook but stopped short of more extreme measures the market favored. Ironically, the losses came on the tail of strong results from giant retailers Target and Lowes and the fact that today marked the landmark achievement of Apple becoming history’s first $2 trillion company.  The S&P regained its pandemic losses yesterday, the Nasdaq way back in June, but the Dow remains 5% shy of this goal. Volume remains below average at 8.6 billion. 

The pandemic bull market: S&P 500 closes at record high

There was nothing but good news today. The S&P finally recovered all of its pandemic losses from March scoring its first all-time high since February having surged 55% since March 23 and thus marking after 103 days the shortest bear market in history.  It was also the S&P’s largest 103 day gain in 87 years. The Nasdaq clocked in its 18^th record closing high since June.  Consumer discretionary spending rose and home building accelerated its most in four years.  So why the 66 point drop in the Dow despite all this revelry?  The short answer is there’s just no getting around all the doubts about the underlying health of the economy.  Though the bulls are running, investors aren’t confident the markets currently represent the overall economy.  As has been stated repeatedly, there remains a lot of uncertainty out there.  Maybe tomorrow’s Fed minutes will shed some light on outlook and calm some nerves.  That’s the hope anyway.  There was no volume data included in any of today’s reports. 

Nasdaq hits record high close due to tech rally

The Nasdaq had a very good day reaching a new record high. Per today’s expert, the explanation is simple, “Tech is the only trade.  Things that were 10 years away on Feb 18 are here now: Distance learning, seeing your doctor via Zoom, ordering pharmaceuticals via mail.”  Well, I’m not sure about that last one.  My parents were getting their prescriptions mail order twenty years ago. Still it does speak strongly for how the pandemic has changed the market and the economy. Both have been forced to reinvent themselves. Regarding Q2, 81% of 457 companies have beaten estimates. Though there are still a lot of things going on, the election only one, that are bringing considerable uncertainty to the market.  So volume remains below average, today considerably so, at just under 8 billion. 

Succinct Summation of Week’s Events 8.14 (plus 7 Stocks to Buy at 52-Week Lows)

Below is the usual weekly summation, the main positive being that the three major indexes again closed up for the week and have as of Friday regained most of the losses incurred during the pandemic March crash. For once, whether wisely or not, the spiraling pandemic has been knocked off the list of major negatives and supplanted by the controversy regarding mail-in voting and the U.S. Postal Service.  The bonus this Sunday is something we're always looking for -- a nice list of investment opportunities, this time the solid companies that are currently at 52-week lows and therefore ripe for the buying.  Hope everyone enjoyed this very pleasant weekend.  

Internet Disinformation

This week's segment of the PBS series WealthTrack is already being called one of the most important episodes they've ever done on the all important topic of cyber misinformation and disinformation.  Do check it out.  

S&P 500 ends almost flat as record remains elusive

After opening over a hundred down, then peaking around 2 pm a little under a hundred up, the Dow dove again but recovered in the last few minutes to close up 34.  The volatility comes from just one place – uncertainty. There is uncertainty over the stimulus, uncertainty on the overall economy, uncertainty about the pandemic, uncertainty about the upcoming presidential election.  The bright spots: the S&P continues to hover within mere points of its record high without quite getting there, though today’s expert clarifies this in saying, “New all-time highs are like rusty doors and require several attempts before they finally break open. Approaching, but not breaking through, is actually standard.” Other bright spots include factory output increasing and consumer sentiment remaining steady while a down spot is retail sales increasing less than expected due to spiraling pandemic cases and reduced incomes. But the negatives today outweighed these positives which was reflected in the substantially reduced volume of 7.8 billion. 

S&P 500 ends down slightly after flirting with record levels again

The Dow and S&P sank moderately today as giant Cisco dampened their Q1 ’21 forecast provoking fears that more companies will be following suit. All bets remain on Congress coming up with a stimulus package but caution is in order until that happens. Wall Street is also calling it good news that jobless claims fell below 1 million for the first time since March but this is really false optimism since much of this decline is naturally the result of Congress failing to extend benefits that expired earlier this month. The reality is that less than half of the 22 million jobs lost due to the pandemic have been recovered to date. The good news is that the three major indexes have now recovered most of the trillions in capitalization that was lost at the beginning of the pandemic.  But caution does reign as reflected in today’s considerably below average volume of 8.7 billion. 

S&P 500 finishes within points of record high close

A broad rally today shot the Dow up almost 300, the Nasdaq almost 230, the S&P over 45.  And though a little history was made with the S&P closing just a few points shy of its February record, the odd thing is no explanation was given for the rally. There were a plethora of reasons why the market should have tanked, among them the risks of a closely contested presidential election, a breakdown in stimulus talks as the stalemate goes into its fifth day, and consumer prices and unemployment increasing. The only good news as stated by today’s expert, “There may be a little bit of relief in that you now have basically two centrist candidates on the Democratic ticket,” but “a little bit of relief” hardly explains a 290 point jump in the Dow. Let’s wait until tomorrow. Meanwhile, volume was again a little below average at just under 9.4 billion. 

S&P 500, Dow snap seven-day winning streak as concern mounts over stimulus deal

All three indexes closed down today ending a winning streak for both the Dow and S&P, all centered around the stalemate over the stimulus deal. The Democrats and Republicans were supposed to be meeting today to continue negotiations. When McConnell announced there would be no meeting, the market dove as investors have been counting on the two parties to resolve their differences. The Nasdaq continued to fall as the rotation from tech to value marked its third day. Despite the downturn, early in the session the S&P came within a breath of once again achieving its record high. Volume was above average at 11.2 billion.

S&P 500 ends up slightly, tech-related shares underperform value

A continued rotation from tech to value pushed the Nasdaq down and jumped the Dow 1% as investors continue awaiting news on the stimulus bill. The S&P is inching closer to its record high but is being held back by its tech heaviness but helped by better than expected Q2.  There was also some inching forward by the weekend’s executive orders from the White House and Mnuchin’s comments today that a bill could be done this week.  As the market waits for that bill, volume continues a little below average at just under 9.8 billion. 

Succinct Summation of Week’s Events 8.7.20 (plus Monthly Dividend Stocks With Double-Digit Yields)

Below is the usual weekly summation, the main positive being that strong tech keeps the markets rolling, the main negative (besides the failure of Congress to pass a relief bill) being the payrolls in July, though they came in just a little below forecast (that's what it says in this column though, during the week, it was reported they were actually a little above forecast) nevertheless rose quite a bit less than in June. The bonus this Sunday is Part II of my dividend report from U.S. News Invested, this time with good companies that pay double-digit dividends meaning that they are actually beating the market and with relative safety.  It is an option to consider.  Summer has come back. Hope everyone enjoyed the weekend.  

5 Best Dividend Stocks to Buy in August

For your weekend reading and since there's been a lot of talk of late about using dividend stocks for both better yield and at the same time good risk management, I post this recent article from U.S. News about some solid companies that are paying dividends with yields even higher than the market.  Safety and profit too -- who can beat that?  Enjoy the rest of the weekend.  

Slowing job growth, stimulus worries weigh on Nasdaq

Even though the jobs reports came in higher than the forecast and even though these expectations are already supposed to be discounted in the index, there was still an awful lot of up and down today with the 1.8 million new jobs that were created in July being so much lower than the 4.8 million in June.  Much of the up and down was due to the continued haranguing over the stimulus package, the Democrats want more benefits for the jobless, the Republicans less.  But as today’s expert says, “Unemployment is through the roof, politicians have promised another $1 trillion, and it would be political suicide if they don’t deliver.”  Both the Dow and S&P closed nearly even with the Nasdaq sinking after 7 straight sessions of being up. It’s odd that the S&P gained today, if only 2 points, but yesterday it was reported that the index was just 1% below the records; today it’s 1.5% below even though it’s increased. There’s some fuzzy math here. Q2 is almost over with 82% of companies beating estimates.  Volume was a tad below average at just under 9.8 billion. 

Wall Street gains as markets look to aid package, Nasdaq closes above 11,000

The Dow had another 3-digit rally today marking its fifth consecutive gain along with the S&P and the seventh for the Nasdaq, all triggered by renewed hopes for a  new stimulus package.  Data again was mixed with one report showing a fall in jobless claims while another report showed a big surge in job cuts, not exactly consistent info.  So Friday’s jobs report which is forecast at almost 1.6 million new jobs will be watched with great interest.  Once again the Republicans have proclaimed that if there is not a deal reached by tomorrow (Friday), there won’t be a deal.  But since they said the same thing last week, today’s expert opined that “most people probably view that as a negotiating ploy” and not taking it seriously since everyone knows the Congress has to do something. Q2 is in the final stretch with 424 companies having reported and overall earnings 22% above forecasts. Today the S&P and Dow are just 1% and 7% away from their record highs and the Nasdaq today reached a new record breaking 11,000 for the first time. Volume is again a little below average at 9.7 billion, almost certainly because investors are waiting for the stimulus package to materialize. 

Wonderful world of Disney earnings surprise boosts Wall Street

A fourth consecutive day of a 3-digit climb on the Dow on what can only be called a surprise on a couple of levels.  After yesterday’s news proclaiming, “Walt Disney Co. rose 4% in extended trading after the company reported a rare quarterly loss,” today the headline is “a surprise quarterly profit from Disney.” So yesterday’s story had to be wrong and with this new development of an actual Disney profit, its stock rose another 8.8% and the Dow another 373 points.  Disney’s accomplishment was amazing considering that its theme parks until recently have been closed due to the pandemic. As Q2 proceeds with “better than feared results,” the S&P has jumped from being 4% shy of its record last week to being 3% shy yesterday to 2% shy today.  Data has been mixed with industry gaining but hiring declining. Volume was close to average at just over 10 billion. 

Wall St. ends higher as investors eye stimulus

A third consecutive day for a 3-digit gain as investors continue savoring the wonderful Q2 report from Apple and keep high hopes for the pandemic relief bill, all while 83% of 352 S&P companies have beaten estimates.  The index is now just 3% shy of its February record. But the day’s sentiments can best be expressed by the following comment from today’s expert, “I do not expect U.S. equities to revisit the March lows.”  The Disney Co. despite reporting a quarterly loss, rose 4 percent.  That’s investor confidence for you!  Volume was again a tad below recent averages at 9.7 billion. 

Nasdaq hits record high close as traders eye M&A and stimulus

With Apple turning in a glowing Q2 report and several other companies entering into huge M&A deals, the Dow shot up 236 points with congressional talks resuming to hammer out the second pandemic relief bill.  With Q2 half way through, a record number of S&P companies have beaten estimates (and they’re still tempering this good news by saying that Q2 forecasts were dramatically low but hasn’t that been the trend the past few years anyway?)  Apple is now just 7% below the $2T mark in capitalization which would be the first company in history to reach that, just as it was the first company in history to reach the $1T mark.  It doesn’t seem like that was that long ago.  Apple is on fire!   Volume was just a tad below recent averages at 9.8 billion. 

Succinct Summations for 7.31.20 (plus AAII: Account Inventory)

Below is the usual weekly summation, the main positive that Q2 Big Tech continues to do very well and consumer spending is again on the rise, the critical factor that saved the economy from pre-pandemic recession. The big negative continues to be the pandemic with the death count now surpassing the 150K mark and GDP falling almost 33% (annualized) in Q2, the worst in history. For the bonus this week, I will take us all back to basics with an article published by AAII on Thursday providing a very good summary of all the different kinds of investment accounts and their various pros and cons.  We finally had that storm that broke the heat and have had a perfectly delightful Sunday.  Hoping for more of the same during the coming week.  

7 Best Contrarian Stocks to Buy

For your weekend reading I once again submit this week's edition of U.S. News Invested in which they recommend seven of the best stocks that everyone else is selling and that therefore the contrarian approach is to buy against, one of Warren Buffett's major strategies -- pick quality companies that are currently down for the count and get them before the rest of the market figures how good they are.  Happy research and try to stay dry tomorrow.