This week, shortened by holidays, ended on Friday the same way as last week … with all major indices at record highs! Stocks rebounded from yesterday’s malaise with a rally of more than 1% that turned weekly totals into positive and provided some momentum for the start of the earnings season.
What happened to all of the faltering economic recovery worries reported as the main cause of Thursday’s slide? It shows that the performance of a single session doesn’t mean much to such a nervous market. Do you know what weight is? The main indices all rose by double digits in the first six months of 2021.
The Dow had the best performance, jumping 1.3% (or roughly 448 points) to 34,870.16, while the S&P was just behind, climbing 1.13% to 4,369.55. The NASDAQ was also exactly there with a plus of 0.98% (or around 142 points) to 14,701.92.
These results lead to record closings for each index, just like the last Friday before the July 4th holidays. There were also slight gains in the indices for the four days. The S&P and NASDAQ rose 0.4% each, while the Dow rose 0.2%.
It’s a drop in the ocean compared to the more than 1% gains we enjoyed last Friday, but this short week really served as a buffer between the big July 2 jobs report and the start of earnings season.
“Total second quarter earnings for the S&P 500 index are currently projected to increase 62.2% year over year, with sales up 18.2%. This would follow the earnings growth of +49.3% with + 10.3% higher sales in the first quarter of 2021. ” said Sheraz Mian in his just published Result preview Items.
“The estimates have risen steadily over the past few months, with the current growth rate rising from + 62.2% at the beginning of the quarter on April 1 and + 41.6% at the beginning of January from + 50.6%.” he went on.
As usual, the big banks start reporting from JPMorgan (JPM) and Goldman Sachs (GS) before the market opens on Tuesday. Then we get Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) on Wednesday, all before the Open. Morgan Stanley (MS) and US Bancorp (USB) join Taiwan Semiconductor (TSM) and UnitedHealth (UNH) on the table on Thursday.
A total of almost 130 companies will report next week.
The current portfolio highlights:
Blockchain innovators: In 2020, Dave earned more than 50% ROI from eGain (EGAN), a leading provider of cloud-based customer loyalty solutions. It was playing with the new “stay at home” economy. Nowadays, EGAN is a Zacks ranked # 2 (Buy) that has topped the Zacks consensus estimate for every quarter going back to September 2019. And growth is slated to return next year, with EPS expected to rise nearly 12.7% with an estimated 22% increase in sales. The editor wants to see if history repeats itself and added EGAN again on Friday. The portfolio also sold iCAD (ICAD) at a loss. Read the full report to find out more about today’s action.
Counterstrike: “And just like that, we’re back to highs. Impressive and steady rally after yesterday’s sales, that honestly surprised me. This back and forth is really something. I was ready to go short and expand my stock list.” buy and wham, new highs.
“I speak to a lot of traders all day and a few others weekly. There seems to be a common theme that this market is very difficult. We all struggle to worry about these daily movements, strangest atmospheres I have ever seen, and it is very difficult to be sure of one position.
“When we get into the winning season we will focus on the downside moves to create. But I also want to stress that we may do things a little differently. I’m playing with the idea of more trades, tighter stops, and narrower courses. ” Goals that can be achieved in less time. This means that we are a little more active, but also with an attitude not to overdo it. I think there is a good middle ground we can strike in these summer months. “- Jeremy Mullin
Options trader: “It’s funny how everyone wrung hands on Thursday over concerns about growth (for no good reason) and how everyone went from a runaway inflation panic (wrong) to a sudden deflation panic (wrong too) for no other reason than ‘To explain’ a downward movement of less than -1%.
“This hysteria seemed to have lasted for a day.
“The point is, the markets drop a little sometimes. And after such a spectacular run, a bit of profit-taking is perfectly normal. And that is the most important. See the big picture and don’t let the noise scare you about what Thursday’s pullback was. “- Kevin Matras
Have a nice weekend!
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